MESSAGE FROM THE BOARD OF DIRECTORS

In 2022, the ASEAN economy was heading toward a continued recovery with increased regional consumption and released COVID-19 situation. Nonetheless, COVID-19 restrictions in China and the drought in the southern part of the country in the second half of last year have led to supply chain instability which affected the manufacturing and trading sectors in the region while global economy was affected by highly fluctuated energy price. This was a major cause of hyperinflations and the surge of interest rates in many countries, adding pressure on overall economic recovery which need to be closely monitored.

With these challenges, SCGP continued to pursue quality growth and strengthen its position as a leading integrated packaging solutions provider with strategic expansions via merger and partnership (M&P), organic expansion while further enlarge the customer network to new markets with high growth opportunity. The Company prudently operates amidst economic volatility, while fulfilling growing needs of customers and consumers.

In 2022, SCGP expanded and reinforced its business with M&P of Peute Recycling B.V. (Peute), the largest packaging material recycling company in the Netherlands, and Jordan Trading Inc. (Jordan), a renowned trader of recovered paper (RCP) based in the USA. These investments epitomized an important progress of SCGP’s integrated business model. The entrance into the fast-growing packaging material recycling business would resolutely enhance the Company’s raw material sourcing capability which is one of the essential factors that supports long term growth of packaging business. In addition, SCGP has continued to organically expand its Fiber Packaging, Packaging Paper, Consumer and Performance Packaging businesses. The investments included production capacity expansion of Thai Containers Group’s high-quality Fiber Packaging & sheet board, and also Flexible Packaging operation under Prepack to improve the Company's capability to offer high-quality packaging solutions.

Furthermore, SCGP has been relentlessly developing integrated packaging solutions to meet customers’ and consumers’ needs in alignment with current and future megatrends. Strategic efforts have been executed to expand the portfolio to rapidly growing markets with high potential. The addition of new product categories & sale channels of Foodservice Packaging would provide broad accessibility to consumers and Foodservice entrepreneurs in order to purchase high quality food and beverage packaging with ease. The Company also reinforced its Medical Supplies & Labware business through the partnership with three of Thailand’s leading medical suppliers which can import Deltalab’s products and expand its market in Thailand & other potential regions to meet the growing healthcare trends.

In term of operational excellence, SCGP focused on improving its operation with the pursuit of synergy and cross selling such as Foodservice Packaging which is offered to both Duy Tan and Go-Pak customers, customer network expansion of Batico’s Consumer and Performance Packaging into SOVI’s customer group. Digital technology and automated systems were adopted in Fiber Packaging production process at the flagship automated plant in Thai Containers Group’s Ratchaburi Plant, the first in Thailand. Supply chain and inventory management system were utilized and optimized as mitigation for external and internal risks. All operational processes were supported by our knowledgeable and skilled personnel with expertise in the related fields. The organizational culture has been laid down to embolden and support employees to learn, develop, nurture creative ideas, while working together to deliver values to customers and consumers.

Along with strategic implementation, SCGP operates in accordance with the ESG (Environmental, Social and Governance) principles. The Company is committed on improving the environment with a clear target on greenhouse gas emission reduction to Net Zero by 2050, while taking care of societies through the promotion of local occupations and quality of life, as well as stakeholder engagement which are aligned with SCGP’s Corporate Governance and Sustainable Development Policy. In 2022, SCGP was certified by the Thai Private Sector Collective Action against Corruption (CAC) while received 2 SET Awards, in the categories of Business Excellence (Best Innovative Company Awards) and Sustainability Excellence (Best Sustainability Awards). SCGP was also successful in maintaining its status as one of the leading sustainable companies in Thailand, or Thailand Sustainability Investment (THSI) and SET THSI Index, for the 2nd consecutive year. Moreover, SCGP passed the assessment and rated as the ASEAN Asset Class.

With the commitment and determination, SCGP achieved impressive growth in 2022 amidst challenging macro-economic volatilities and recorded total revenue from sales of Baht 146,068 million, an increase of 18% year-on-year. Profit for the year was Baht 5,801 million, a decrease of 30% compared to the previous year. The Board of Directors has resolved to propose that the 2023 Annual General Meeting of Shareholders approve the 2022 dividend worth Baht 0.60 per share, Baht 2,576 million in total, or 44% of profit for the year of the consolidated financial statements in accordance with the dividend policy. In this, an interim dividend is worth Baht 0.25 per share, and as a final dividend of Baht 0.35 per share.

In 2023, SCGP plans to carry on the quality and sustainable business growth through merger and partnership, value accretive synergy with businesses partners, and the expansion of portfolio into new growth segments in ASEAN and other regions, especially in lifestyle & consumer packaging, food & beverage, medical & health related products, which are essential to consumer’s daily life. SCGP aims to continue its business conducts with customer centricity mindset while also cooperate with our clients to develop value-added innovative packaging solutions that satisfied the consumer's lifestyle. The Company also plans to continuously improve its competitive advantage, production efficiency, and reduce production costs. Part of the efforts would be through the development of human resources, in both capability and technical skills, which are in line with the business growth, emerging risks, and the mitigation plans along with ESG requirements for sustainable world.

The Board of Directors would like to express our gratitude to shareholders, debenture holders, business partners, suppliers, customers, domestic and international financial institutions, and other relevant parties for all the warm support, as well as to all employees who remarkably dedicate themselves and drive the Company forward to its goals and achievements while earning the investors’ trusts. Furthermore, SCGP would like to assure that the Company will continuously improve its organization for future growth with quality and offer packaging solutions that fulfill the evolving needs and lifestyles of consumers while commit to a better society and a sustainable world.

Bangkok, January 24, 2023