27 April 2021

SCGP’s growth unabated after stock market debut, posting Baht 27,253 million revenue in Q1/2021 A 12% increase manifesting potential of business model and effective management

SCGP’s growth unabated after stock market debut, posting Baht 27,253 million revenue in Q1/2021 A 12% increase manifesting potential of business model and effective management

SCGP continues to show solid growth following its debut in the stock market, posting sales revenue in Q1 of 2021 of Baht 27,253 million, up 12% from the same quarter last year, clearly manifesting the potential of the companys business model focusing on an expansion of its regional operations, development of packaging solutions for consumer goods, rapid adaptation and ASEANs gradual economic recovery.


Mr. Wichan Jitpukdee, Chief Executive Officer, SCG Packaging Public Company Limited, SCGP, reports that the Company has been able to sustain a steady pace of growth following its registration in the Stock Exchange of Thailand in October last year.


In the first quarter of 2021, it posted a sales revenue of Baht 27,253 million, a 12% increase over the same quarter of last year, resulting in a profit for the period of Baht 2,135 million, a 23% increase over the same period. Its EBITDA (Earnings before interest, tax, depreciation and amortization excluded dividend from associates  and included FX gain/loss from loans from Q1/2019 onward), meanwhile, stands at Baht 5,267 million, strengthening by 42% from the level achieved last year.


The increase in sales revenue stems from ASEAN consumer demand growth, regional paper price improvement, and the positioning of business model to focus on the expansion of downstream packaging business in ASEAN and customer base to cover diversified industries, particularly those dealing with consumer lifestyle goods such as food and beverages and health products, which are seeing increasing growth because they are essential goods for everyday life. Consumer goods packaging represents 70% of revenue from sales of Intergrated Packaging Chain in Q1 while that for E-commerce continues to grow steadily as a result of changing consumer lifestyles and the COVID-19 infection outbreaks.


At the same time, SCGP has continued to advance its investment strategy, encompassing production capacity expansions and merger and partnership (M&P) deals. Since the end of 2020, the Company has expanded its integrated packaging business which includes: (1) an increase of manufacturing capacity at a plant operated by Fajar of Indonesia to produce packaging paper by an additional 400,000 tons a year; (2) an increased production capacity of high-performance and polymer packaging by 347 million pieces a year by Visy Packaging (Thailand) Ltd.; (3) M&P with Bien Hoa Packaging Joint Stock Company (SOVI) of Vietnam to expand customer base in food and beverages and consumer goods industries; (4) M&P with Go-Pak UK Limited to expand food packaging markets in various regions in response to the rise of megatrends.


Furthermore, the Company puts emphasis on synergy among various production bases for knowledge sharing in product development and innovations, production efficiency enhancement, energy cost management, as well as risk management of raw material costs through recycling stations and business partners. These efforts have made it possible to overcome the recent shortages of containers for shipping of goods.


The years 2020 and 2021 are trying times when all businesses face challenges from the COVID-19 pandemic,says Mr.Wichan. “Nevertheless, SCGP is committed to achieving strong growth. We have been able to achieve sustained growth in the first quarter of this year, which reflects the efficiency of our business model. Our diversification of customer base among various industries and our packaging solutions are geared to meet our customersdiverse needs. We have about Baht 20,000 million of capital expenditures (CAPEX), comprising Baht 15,000 million for M&P and production capacity expansion to diversify our customer base and meet increased demands for packaging. Another Baht 5 million is set aside annually for maintenance, efficiency improvement, research and development, and safety and environmental development.”


The Company is also in the process of expanding its operations, including increasing production capacity of paper packaging in the Philippines by 220,000 tons a year and of flexible packaging in Thailand by 53 million square meters a year. Both projects are expected to be completed in the fourth quarter of 2021.


Meanwhile, the Companys signing of the contract to acquire 70% of shares of Duy Tan Plastics Manufacturing Corporation (Duy Tan) of Vietnam to expand its rigid plastic packaging is expected to be completed in the middle of 2021.