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SCG Announces Operating Results for Q1/2022 Highlighting 4 Strategies to Move Fast and Tap into Global Markets

SCG reported its operating results for Q1/2022, demonstrating a solid performance with strategies to deal with soaring energy and raw materials costs as a result of the Russia-Ukraine conflict. To act proactively and foster sustainable and long-term stability, SCG is emphasizing four strategies: 1) proactive business management with flexibility, 2) timely delivery of innovations to capitalize on opportunities during the country’s reopening, 3) complete construction of LSP project in Vietnam and expand production capacity of High Quality Post-Consumer Recycled Resin of Sirplaste in Portugal, and 4) acceleration of ESG (Environmental, Social and Governance) to build business immunity for long-term growth.

Mr. Roongrote Rangsiyopash, President and CEO of SCG, disclosed, “The company’s unreviewed Operating Results for Q1/2022 registered Revenue from Sales of PHP 237,752 Million  (US$ 4,613 Million), an increase of 7 percent  q-o-q, due to higher sales across all businesses. Meanwhile, Profit for the Period reached PHP 13,789 Million  (US$ 268 Million), an increase of 6 percent q-o-q, largely owning to the improved business performance of Cement-Building Materials Business and higher non-chemical equity income (agricultural machinery business).”

On a y-o-y basis, Revenue from Sales increased 25 percent  from higher sales revenue across all businesses mainly from higher product prices in-line with the market. However, Profit for the Period fell by 41 percent , mainly due to rising feedstock costs from Chemicals Business in Q1/2022. This is along with the fact that the Chemicals industry had better performance in Q1/2021 compared to normal business operations from winter freeze which caused supply shortage in the United States.

In Q1/2022, SCG’s Revenue from Sales of High Value Added Products and Services (HVA) reached PHP 80,118 Million  (US$ 1,555 Million), accounting for 34 percent  of total Revenue from Sales. Moreover, New Products Development (NPD) and Service Solution amounted to 17 percent  and 5 percent  of total Revenue from Sales.

Besides, SCG’s Revenue from outside of Thailand together with export from Thailand was 44 percent of total Revenue from Sales or amounted to PHP 103,743 Million  (US$ 2,013 Million) in Q1/2022, an increase of 30 percent y-o-y.

SCG’s total assets as of March 31, 2022 amounted to PHP 1,389,038 Million  (US$ 26,709 Million), of which 45 percent  represented assets in ASEAN.

SCG in ASEAN (ex-Thailand)

For SCG’s operation in ASEAN (ex-Thailand), the Revenue from Sales in Q1/2022 recorded a 30 percent  increase y-o-y, amounting to US$ 1,274 Million, and 28 percent  of SCG’s total Revenue from Sales. This includes sales from both local operations in each ASEAN market and imports from the Thai operations.

As of March 31, 2022, the total assets of SCG amounted to US$ 26,709 Million, while the total assets of SCG in ASEAN (ex-Thailand) were US$ 15,610 Million, 58 percent of SCG’s total consolidated assets.

Based on the Q1/2022 report, SCG’s total asset in the Philippines was PHP 20,887 Million (US$ 402 Million), an increase of 11 pecent  y-o-y. The company reported Q1/2022 Revenue from Sales at 5,071 Million PHP (US$ 79 Million), a 32 percent  increase y-o-y.

SCG Marketing Philippines Inc. launches the Hardware And More or HAM, the first local hardware store of new solutions and best products for the Filipinos. HAM aims to expand online and physical stores, becoming the one-stop shop with more choices at best value.

Meanwhile, SCG in the Philippines expands its production capacity to serve demands in the local and ASEAN region. At United Pulp and Paper Co., Inc. (UPPC), a new PHP 8.5 billion  paper machine that commenced operations in February will contribute 220,000 MT/year of corrugating medium paper to support the growing packaging demands. Consistently pursuing the sustainability framework of ESG (Environmental, Social, Governance) in driving sustainable business growth, the new facilities adopt eco-friendly designs that consume less water and power while the new power boiler taps unconventional energy sources such as biogas and generates fewer sludges.

Meanwhile, Mariwasa Siam Ceramics, Inc.(MSCI) received the Recognition for Mastery in Quality Management level 3  from the Philippine Quality Award (PQA). Organized by the Department of Trade and Industry, this national award recognizes the achievements of the public and private sectors for performance excellence.

Strengthening business amid global challenges

To respond proactively to global challenges affecting its businesses, SCG   is rolling outfour strategies:

  1. proactive business management
  2. timely delivery of innovations
  3. growth strategy-driven investments, and
  4. Acceleration of ESG (Environmental, Social, and Governance) initiative

SCG adapts rapidly and with the flexibility to eliminate any potential risks associated with rising energy and raw material costs and protracted uncertainty that may persist in the next 3-6 months as a result of the Russia-Ukraine crisis and the COVID-19 pandemic. Among the approaches are to keep tracking of energy prices and boost alternative energy use to reduce costs. In Q1/2022, biomass energy consumption from agricultural waste materials and RDF fuel waste was 16.4 percent, and for 30.4 percent of energy use by domestic cement production. Other approaches also include inventory management to adequately meet the demand and the use of digital technologies to increase energy efficiency and value chain management. For example, SCGC employs artificial intelligence to manage energy used in production, reduce energy consumption, and analyze cost pricing and purchasing opportunities to efficiently procure feedstock based on market conditions while ensuring swift adaptability.

SCG’s solar hybrid solution boasts 24/7 clean energy while maintaining reliability and safety

SCG is capitalizing on the country’s reopening and economic recovery by offering High Value Added Products & Services (HVA) to tap into a new and green lifestyle and well-being sector. Examples include the High Quality Post-Consumer Recycled Resin “Circular PP” from Advanced Recycling technology, which has qualities comparable to virgin plastic resins and is suitable for environmentally friendly food packaging; “SCG Solar Roof Hybrid System” with hybrid system technology that utilizes batteries to store electric energy for use during the day and night, saving up to 60 percent on energy costs; “SCG HVAC Air Scrubber,” an air purifier system that minimizes the cooling load on the air conditioning system, ideal for large buildings and capable of saving up to 20-30 percent on energy costs; using technology to improve the efficiency of construction services such as “CPAC BIM,” a digital technology for precise construction design that helps minimize resource waste and adds investment value; and “CPAC Low Rise Building Solution,” a building innovation that utilizes a precast concrete system that enables rapid, precise, and waste-free installation. In addition, SCG also intends to expand packaging solutions to meet the needs of customers and consumers, such as offering a diverse range of food packaging designs and consumer goods packaging.

SCG acquired the majority of shares in Portugal’s leading plastic recycler, Sirplaste

SCGC has recently completed the acquisition of a 70 percent share in Sirplaste, a leading plastic recycler in Portugal. Together with plans to increase production capacity and enhance the quality of High Quality Post-Consumer Recycled Resin (PCR) to fulfill the global market demand under the brand “SCGC GREEN POLYMER™.” The approach aligns with SCGC’s environmental aims of selling 1 million tons of products under the brand SCGC GREEN POLYMER™” per year by 2030.

Long Son Petrochemicals Company Limited (LSP) has progressed to 93 percent construction completion on its petrochemical complex project in Vietnam as planned. It is readying Manpower in production and sales to prepare for commercial operations in the first half of 2023.SCGC has recently completed the acquisition of a 70 percent share in Sirplaste, a leading plastic recycler in Portugal. Together with plans to increase production capacity and enhance the quality of High Quality Post-Consumer Recycled Resin (PCR) to fulfill the global market demand. The approach aligns with SCGC’s environmental aims of selling 1 million tons of GREEN POLYMER products per year by 2030.

Acceleration of ESG (Environmental, Social and Governance) with ESG 4 Plus (Net-Zero, Go Green, Reduce inequality, and Embrace Collaboration, plus harness good governance). SCG continues to carry out its efforts to attain its goals of zero net greenhouse gas emissions by 2050 and at least a 20 percent reduction by 2030.

SCG will also strive to deliver green innovations and promote environmental stewardship through SCG Green Choice products, whose sales in Q1/2022 was 51% of total Revenue from Sales or 77,214 MB, an increase of 27 percent q-o-q. SCG also promotes SCG Cleanergy, a clean energy provider with cutting-edge technology providing end-to-end solutions from obtaining permission, installing, operating, maintaining, gride connecting, and facilitating power purchase on a virtual trading platform to drive broader use of alternative energy.

The global economic situation, on the other hand, continues to be volatile. Mr. Roongrote concluded, “Keeping a close eye on the situation, forecasting scenarios in a timely manner, and adapting rapidly can enable businesses to continue operating in the face of a crisis. SCG has prepared for a short-term crisis through proactive risk management and long-term opportunities through a business transformation in accordance with the ESG (Environmental, Social, and Governance) approach.”

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