SCGD’s performance for the first 9 months of 2024 showed a net profit of 730 million baht, increasing 15% from last year’s 637 million baht. In Q3, the company faced multiple challenges including domestic economic slowdown, flooding in Thailand and Vietnam, construction market slowdown, retail weakness in the Philippines, and Indonesia awaiting government project budget approvals. However, the company managed operations efficiently, securing 189 million baht profit through cost reduction strategies, using 36.3 megawatts of solar power (10.7% of total electricity consumption), planning additional installations in Vietnam, and increasing biomass energy usage to 19.3% of total heat energy. The company boosted revenue by offering appealing sanitary ware and tiles, especially in the high-growth Vietnamese market, adding large porcelain tile production lines with 2.5 million square meters capacity, expanding distribution channels, opening the first V-Ceramic Manufacturing Outlet store in southern Vietnam, and recently winning the Asia Excellent Brand Awards 2024 for sanitary ware. The company is confident in doubling revenue by 2030.
Numpol Malichai, Chief Executive Officer and President of SCG Decor Public Company Limited, or SCGD, the leading ceramic, surface materials, and sanitary ware business in ASEAN, stated that “Despite ASEAN’s economy not yet recovering, domestic construction projects slowing down, flooding in northern and central Vietnam and northern and northeastern Thailand, weak construction-retail demand in the Philippines, and Indonesia awaiting government project approvals after the presidential inauguration, SCGD has managed operations efficiently. We’ve introduced innovative products focusing on value, convenience, and environmental friendliness, meeting all customer lifestyle needs. This resulted in a 9-month profit of 730 million baht in 2024, up 15% year-on-year, with EBITDA of 2,530 million baht, although sales revenue of 19,585 million baht decreased 9% from the same period last year. For Q3 2024, the company had sales revenue of 6,235 million baht, down 13% year-on-year and 5% quarter-on-quarter, with a period profit of 189 million baht, down 33% quarter-on-quarter and 22% year-on-year, and EBITDA of 766 million baht, down 16% quarter-on-quarter and 13% year-on-year.”
However, the company continues to adapt despite facing various challenges. It manages costs efficiently, continuously improves production processes, and focuses on clean energy use to reduce costs. In Q3, total solar power generation capacity reached 36.3 megawatts, accounting for 10.7% of total electricity consumption, with Thailand producing 24.7 megawatts. In Vietnam, additional solar installations of 1.9 megawatts brought total overseas power generation capacity to 11.6 megawatts. Additionally, the company allocated 63.2 million baht for a Hot Air Generator project at Nong Khae Industrial Estate (NKIE), expected to reduce costs by 16.8 million baht annually when completed in Q2 2025. Currently, the company uses biomass energy for 19.3% of total heat energy.
Looking ahead, the regional construction and decoration market shows high growth potential. The company is preparing to seize this opportunity by expanding Gesce porcelain tiles in Thailand and Vietnam, targeting 14 million square meters by the end of 2025. It has allocated 167 million baht to convert ceramic tile production lines to large porcelain tiles with 2.5 million square meters capacity in Pho Yen, Vietnam, scheduled for completion in May 2025. The company is also expanding distribution channels for better customer access, recently partnering with VAN PHUC TRADING Company Limited with 17 million baht registered capital to open the first V-Ceramic Manufacturing Outlet store in southern Vietnam on October 23, preparing for market growth and supporting products from the southern Vietnam tile factory. Furthermore, the company will add over 170 sanitary ware dealers in ASEAN. In the first 9 months of 2024, sanitary ware sales in ASEAN exceeded 460 million baht. The company is also accelerating expansion in surface materials, sanitary ware, and complementary businesses such as tile adhesives, kitchen countertops, and doors and windows, to maintain existing customers and acquire new ones, targeting doubled revenue by 2030.
“The company transforms customer needs into high-quality sanitary ware and tiles that consistently meet new trends, such as LT by COTTO surface materials for pets, pet shower heads, bathroom furniture made from durable composite materials, ready-made titanium doors and windows, and kitchen countertops with enhanced durability and reduced surface liquid absorption. These innovations help elevate our brand presence in consumers’ minds. Recently, COTTO received the ‘Marketeer Number 1 Brand Thailand’ award for leading surface materials and sanitary ware brands from Marketeer media, the ‘Outstanding Pet-Designed Construction Material Award’ (Pet Award for LT by COTTO flooring) from Baan Lae Suan, and the ‘Asia Excellent Brand Awards 2024′ in Vietnam,” said Mr. Nampol.
Regarding the company’s notification to the Stock Exchange of Thailand about PT Keramika Indonesia Assosiasi Tbk (or “KIA”) and its subsidiaries, KIA has filed a lawsuit against Indonesian government agencies requesting the cancellation of claims where government agencies stated that KIA has debt to the Indonesian government totaling approximately 3,000 million baht. The lawsuit also requests lifting the suspension of KIA and its subsidiaries’ registration system access with the Ministry of Law and Human Rights (MOLHR), which was imposed during the investigation of facts regarding minority shareholders who were KIA’s founders.
Throughout this process, KIA and its subsidiaries have cooperated well with Indonesian government agencies, clarifying that they have no connection with KIA’s founders. The KIA shares were acquired honestly through the stock market, and leading Indonesian legal consultants have verified that both the KIA shares and KIA and its subsidiaries have no debt obligations to the Indonesian government.
Most recently, although the Indonesian High Court has upheld the lower court’s ruling dismissing the lawsuit against Indonesian government agencies, KIA and its subsidiaries will proceed to appeal to the Supreme Court to request a review of the above judgment and seek clearer reasoning.
Published on: Oct 30, 2024
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