27 July 2021

SCGP maintains healthy growth with first half-year earnings of THB57,148M And with plan for progressive growth in the year’s second half

SCGP maintains healthy growth with first half-year earnings of THB57,148M And with plan for progressive growth in the year’s second half

SCGP earns a revenue of baht 57,148 million during the first half of this year, up 24% from the year before, maintaining strong growth from increasing demand for packaging products, expanding export in ASEAN, higher production capacity, and successful merger and partnership (M&P) strategy. The second half of the year expects to see closure of deals in Indonesia and Spain, increasing collaboration with partners as well as boosting capacity in ASEAN to ensure continuous growth.

Mr. Wichan Jitpukdee, Chief Executive Officer, SCG Packaging Public Company Limited, SCGP announces that SCGP’s performance during the first half of 2021 yielded a total sales revenue of baht 57,148 million, an increase of 24% from the same period last year and a profit of baht 4,398 million, an increase of 21%. Meanwhile, its EBITDA (earnings before interest, taxes, depreciation, and amortization, excluding dividends from partner companies but including profits or losses from currency exchange on loans) of baht 10,831 million is an increase of 23% from last year.

The increased revenue from sales was the result of rising demands for packaging products and increased exports in ASEAN of such products as consumer goods, food, and frozen food, as well as economic recoveries from the COVID-19 pandemic in the United States, Europe and China. While increased energy costs and shortages of freight containers exert pressure on performance, the Company continues to improve its cost management and operations to enhance competitiveness.

At the same time, the Company has been able to earn an increase in revenue through maintaining its leadership as an integrated packaging solutions provider in ASEAN and its planned expansion through merger and partnership (M&P) with Bien Hoa Packaging Joint Stock Company (SOVI) of Vietnam and investment in Go-Pak UK Limited to enable expansion in other regions. Past endeavors to increase capacity include increasing production of paper packaging in Indonesia as well as set up production of performance and polymer packaging products in Thailand.

“SCGP has been able to maintain steady growth. This is the result of our planning a growth strategy encompassing expansion of our current business operations and M&P both here and abroad. We expect that in 2021 we will invest no less than baht 20 billion to expand our customer base to cover multiple industries, and add diverse packaging portfolios as well as increase research and development of innovations, work processes and business models in order to come up with packaging solutions that respond to individual customer’s needs. We’ll also look at improving cost management on a continuous basis,” says Mr. Wichan.

On 27 July 2021, the Board of Directors of SCGP has approved a H1/2021 interim dividend payment of 0.25 Baht/Share (Baht 1,073 million), which is payable on August 25, 2021 (XD-date on August 9, 2021, and record date on August 10, 2021).

Mr. Wichan adds: “As for the industry outlook for the last half of the year we expect to receive positive impacts from the US and Europe’s economic recovery. Having said that, there remain uncertainties arising from the COVID-19 pandemic impacting the economy, especially in ASEAN.

However, for the latter half of the year, SCGP will try to sustain growth with projected sales for the entire year of no less than 100,000 million baht. The Company will operate according to its strategic plan with a project to boost production capacity, which is to increase production of paper foodservice packaging for an addition of 1,615 million pieces a year in Thailand and Vietnam, which is expected to begin commercial operation by the third quarter of this year. Moreover, the production capacity for paper packaging in the Philippines will be increased by 220,000 tons per year while production of flexible polymer packaging in Thailand is to be increased by 53 million square meters per year by the fourth quarter of the year.

“SCGP also has initiated M&P projects, the latest of which took place on July 23, 2021, when we acquired 70% of Duy Tan Plastics Manufacturing Corporation (Duy Tan), Vietnam’s leading producer of rigid plastic packaging products. In addition, we are in the process of closing deals in the third quarter of 2021, including the acquisition of 75% of PT Indonesia Dirtajaya Aneka Industri Box, PT Bahana Buana Box, and PT Rapipack Asritama (Intan Group), to expand our paper packaging operations in Indonesia. We have also acquired 85% of shares in Spain’s Deltalab, S.L. to enhance our potential to provide services and support the growth of our medical supplies and labware at the global level. SCGP will maintain strength by collaborating with our partners to achieve sustained growth along with special attention to environmental, social and governance (ESG) concerns,” Mr. Wichan adds.