Following SCG’s 2024 financial performance announcement, the company remains focused on maintaining cash flow and strengthening organizational health—both key factors in navigating economic uncertainties in Thailand and globally. However, another crucial strategy to watch is SCG’s accelerated expansion into high-potential new markets, particularly in ASEAN, a region with strong growth prospects. Diversifying its business, driving innovation that meets rapidly evolving consumer demands, and ensuring sustainability are all essential to achieving robust growth and creating long-term value.
Strengthening the Organization and Targeting High-Potential Markets
Thammasak Setthudom, President & CEO of SCG, reaffirmed the company’s commitment to growth in 2025, emphasizing resilience and strategic market expansion.
“SCG is committed to meeting customer needs while continuously exploring opportunities in high-growth markets. ASEAN, where we have been operating for years, is a rising economic hub and a critical production base, supporting both local consumption and export potential. Additionally, we are expanding into emerging markets such as the United States, the world’s third-largest economy, Europe, which is a key market for sustainable products, and SAMEA (South Asia, Middle East, and Africa), a region with a GDP exceeding 70% of the global average and home to over 40% of the world’s population.”
ASEAN: The Rising Economic Star
ASEAN is poised for strong economic growth. The Asian Development Bank (ADB) has revised its 2025 GDP forecast for the region from 4.5% to 4.7%. Notably, Vietnam’s economy is projected to expand by 7-8%, driven by government-led foreign direct investment (FDI) and strong domestic demand. Meanwhile, Indonesia, expected to grow by 5-6%, remains a key market with ongoing economic stimulus measures, including the establishment of special economic zones, major infrastructure projects, and the development of a new capital, Nusantara. These factors contribute to a higher-than-global-average GDP growth outlook for both countries.
Recognizing ASEAN’s potential, SCG has made significant investments in the region. As of December 31, 2024, 46% of SCG’s total assets were located in ASEAN (excluding Thailand), with Vietnam and Indonesia serving as the company’s strategic growth hubs. As these economies expand, demand for goods and services is set to rise, creating opportunities for SCG to strengthen its market presence.
Business Unit Strategies
Chemicals: Advancing High-Value-Added (HVA) Products and Cost Efficiency
The petrochemical industry has faced intense competition due to increased production capacity in the region. However, SCG Chemicals (SCGC) continues to drive high-value-added (HVA) innovations while managing cash flow, costs, and working capital efficiently to maintain competitiveness.
A key initiative is the Long Son Petrochemicals (LSP) Project, Vietnam’s first integrated petrochemical complex, which supplies both domestic and international markets. The project enhances SCGC’s long-term competitiveness in the global petrochemical industry while reducing greenhouse gas emissions through increased ethane feedstock usage. The company has secured a long-term ethane supply contract of approximately 1 million tons per year for 15 years and has leased three ethane carriers, with two more in the pipeline. Storage and plant modifications are set for completion by 2027, with SCG funding the project internally.
Packaging: Expanding Growth-Driven Product Lines and Strategic Partnerships
SCG Packaging (SCGP) has a diverse product portfolio in ASEAN, including paper packaging, polymer packaging, and food packaging, catering to the growing demand in the food, beverage, and consumer goods sectors. This has solidified SCGP’s leadership in the ASEAN packaging market.
To enhance competitiveness, SCGP is expanding its integrated packaging services across ASEAN through mergers, partnerships, and business expansions. Key initiatives include:
- Integration and Knowledge Sharing: Collaborations with businesses to exchange expertise, technology, and expand customer bases.
- Strategic Joint Ventures:
- Fajar (Indonesia): A leading producer of packaging paper, supporting Indonesia’s rapidly growing economy.
- Starprint Vietnam JSC: A manufacturer of offset folding cartons and rigid boxes with a strong client base of global and national brands.
- Duy Tan (Vietnam): A well-known producer of rigid polymer packaging and household items.
- Market Expansion into Healthcare Packaging: Investing in VEM-TH (Thailand) to strengthen SCGP’s position in the medical and laboratory equipment packaging sector, which has strong growth potential.
Cement and Construction Materials: Sustainability and Market Adaptability
SCG’s Cement and Construction Materials Business is benefiting from ASEAN’s economic growth, particularly with its low-carbon cement, introduced as a first in Vietnam. Additionally, SCG’s local cement brands, such as BEZT in Indonesia and ADAMAX in Vietnam, offer competitive pricing and quality to cater to diverse customer needs.
Retail Expansion:
- SCG Distribution and Retail plans to expand its Mitra10 home improvement stores in Indonesia from 56 to 100 locations by 2030.
- SCG Décor (SCGD) has launched V-Ceramic tile and sanitary ware stores in southern Vietnam and is developing high-value porcelain tiles, known for their durability and aesthetic appeal.
- SCGJWD Logistics is expanding cold storage and temperature-controlled logistics services across ASEAN to support the region’s growing supply chain needs.
Conclusion: SCG’s Competitive Outlook for 2025
SCG believes that rapid adaptation and strategic expansion into new markets, particularly ASEAN, will enhance its competitiveness in 2025. This approach not only strengthens the company’s ability to navigate challenges but also fosters sustainable long-term growth, benefiting economies, communities, and the environment in every market where SCG operates.
Despite the complexities of today’s business environment, SCG’s proactive strategies ensure that it remains a leader in innovation, sustainability, and global market expansion—positioning itself for continued success in the years ahead.
Published on: Feb 19, 2025
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