SCG latest operating results highlight agility and strategies to overcome COVID-19
SCG, a leading conglomerate in the ASEAN region, has amped up business strategies to triumph in the dragged out COVID-19 battle with agility and solid business continuity management.
Roongrote Rangsiyopash, president and CEO
of SCG, at the press conference to announce the group's latest operating results
The group will continue to focus on maintaining long-term business stability with developments of total solutions and innovations to fulfill needs in the new normal, leveraging digital channels to push online purchases to shine in the ASEAN market.
SCG’s profit in the second quarter of 2020 reached VND6.860 trillion ($297.83 million), up 33 per cent on-year, due to the improved performance at all three of SCG’s key business units – cement-building materials, chemicals, and packaging – driven by cost optimisation efforts and business continuity. Additionally, it reported an increase of 35 per cent on-quarter mainly attributed to improved chemicals business performance.
The group’s sales revenue for the first half of 2020, however, dropped 9 per cent on-year to VND148.6 trillion ($6.46 billion), due to lower chemicals prices. Profit for the period declined by 13 per cent on-year to VND12.052 trillion ($524 Million), which is mainly attributed to decreased chemicals margins during the first quarter.
SCG’s revenue from sales of high-value-added products and services (HVA) for the first half of 2020 reached VND67.062 trillion ($2.9 billion) or 45 per cent of its total sales revenue.
SCG in the ASEAN (ex-Thailand)
As of June 30, 2020, the total assets of SCG amounted to VND530.5 trillion ($23 billion), while the total assets of SCG in the ASEAN (ex-Thailand) amounted to VND192 trillion ($ 8.35 billion), which is 36 per cent of SCG’s total consolidated assets.
Based on its recently-released second-quarter report, SCG in Vietnam owned VND88.8 trillion ($3.86 billion) worth of total asset, an increase of 59 per cent on-year mainly from its chemicals business.
During the period, the group reported sales revenue of VND6.976 trillion ($303.3 million) which includes sales from both operation in the country and imports from the Thai operations. This represents a decrease of 6 per cent on-year. For the first half of this year, SCG’s Vietnamese market reported revenue from sales of VND13.086 trillion ($568.96 million), down 5 per cent on-year mainly from all businesses.
|Regarding to the current COVID-19 pandemic in Vietnam, SCG have been continuing on implementing full-blown business continuity management.
Regarding to the current COVID-19 pandemic in Vietnam, SCG have been continuing on implementing full-blown business continuity management. To keep employees and their family safe from COVID-19, SCG has applied a new way of work called “Hybrid Workplace” that allows much greater flexibility for employees.
They can work on site, work from home, or work from anywhere the company considers safe and apply physical distancing guidelines. Furthermore, SCG and its subsidiaries realise that the health and safety of stakeholders are the most important aspect of having a good quality of life in times of COVID-19 pandemic, and so they continuously support communities across the nation by donating 400 tonnes of cement to build 45 playgrounds in the central province of Quang Binh and provided mobile clinics for health checks and safe transportation education programmes for communities in Long Son commune and Ba Ria-Vung Tau province in southern Vietnam.
Notably, SCG’s subsidiary Binh Minh Plastic was ranked amongst the Top 50 Best-Performing Companies on the Vietnamese stock exchange in 2019 by by Nhip Cau Dau Tu Magazine for in financial results for three fiscal years in a row, based on three indicators: revenue, return on equity (ROE), and earnings per share (EPS).
Roongrote Rangsiyopash, president and CEO of SCG, said, "Amid the COVID-19 pandemic, while SCG isn’t in industries severely affected like tourism or airlines, the group has constantly monitored and assessed the situations to stay atop in an environment of high uncertainties.”
SCG has put in place more-focused business strategies ranging from Prepare for the Worst by setting up sales plans and transport arrangements for possible lockdown and Plan for the Best by optimising production capacity to meet the growing demand to Digital Transformation to implement the group's Optimisation Model.
Furthermore, the group has taken a dynamic approach by offering solutions, products, and services that better fulfill the needs and capture the untapped market in the wake of growing trends of e-commerce, on-demand food delivery service, and health and wellness. As a result, the operating results for the second quarter and the first half of this year were relatively less affected by the global economic slowdown.
The packaging business focuses on optimising manufacturing process and introducing new standards to ensure safety
The Packaging Business remains strong with upside potential due to the merger and partnership with Fajar Surya Wisesa Tbk, a leading Indonesian packaging paper company, Visy Packaging (Thailand) Ltd., and the planned acquisition of Bien Hoa Packaging JSC or SOVI in Vietnam. The moves have contributed to a strengthening of the company's portfolio in the ASEAN market as well as better satisfying customer needs.
For business continuity management, Packaging Business focuses on optimising manufacturing process in Thailand and ASEAN countries, namely, Vietnam, Indonesia, the Philippines, and Malaysia to streamline processes as well as introduce new standards in countries where the company operates to ensure the safety of staff, customers, and partners.
Packaging business also works closely with clients throughout the supply chain to ensure reliable raw material sourcing and logistics management as well as enforce strict hygiene practices in delivering packaging solutions.
The Chemicals Business has executed its business continuity management to ensure maximum production capacity and seize business opportunities in a challenging market environment brought about by the COVID-19 pandemic.
The group has made efforts to ensure the safety of staffs such as providing accommodation, facilitating transportation, arranging working groups and area divisions at the plant, and maintaining high standards in quality control and cleanliness. Meanwhile, with production flexibility, the business could cater to rapid change in demand and secured increased sales volume amid market volatility.
SCG will continue to expand the proportion of high value added products and services to improve competitiveness, ride a market upturn, and meet customers’ needs.
Furthermore, Long Son Petrochemicals (LSP) in Vietnam has progressed as planned. The project remains under construction and has reached 45 per cent completion.
The Cement-Building Materials Business has also faced challenging market conditions. The business has taken adaptive approach by focusing on offering product and services with total solutions and developing Active Omni-Channel to increase retail sales and construction innovation that help improve the convenience, precision and efficiency of construction.
SCG began its business operations in Vietnam since 1992 with trading business and gradually expanded investment in diversifying business in the cement-building materials, chemicals, and packaging sectors.