Not your routine conglomerate

Not your routine conglomerate

SCG realises improving the community and the environment are vital in building a sustainable business, writes Lamonphet Apisitniran

Mr Roongrote says the company puts ESG concerns at the centre of its operations.
Mr Roongrote says the company puts ESG concerns at the centre of its operations.

Not content with following a routine of setting a growth target and calculating profit, the industrial conglomerate Siam Cement Group (SCG) pays heed to social concerns as part of its sustainable journey.

Helping villagers and businesses cope with the pandemic impact not only displays sympathy, but it also builds closer relationships with people under an environmental, social and governance (ESG) criteria.

ESG is a set of standards adopted by investors who want to support businesses that care for the environment and people (comprising employees, suppliers, customers and villagers) as well as promote good governance to deal with a range of issues, from executive pay and audits to shareholders' rights.

While admitting Covid-19 did have some impact on the 108-year-old company's businesses, SCG joined government and private sector efforts to relieve the plight of small and medium-sized enterprises (SMEs) as well as villagers.

"I would like to encourage everyone to help SMEs by buying their products. We can lead our country out of the crisis if we help each other," said Roongrote Rangsiyopash, president and chief executive of SCG.

SCG wants to resume healthy, sustainable growth again after the pandemic is controlled, he said.

SURVIVING TOGETHER

In the midst of Thailand's biggest Covid-19 outbreak, SCG assisted not only its own infected employees, but also those of its business partners, SME owners and health officials struggling to accommodate patients, said Mr Roongrote.

Given its partners' liquidity shortages, the company delayed due dates for debt repayment and acted as a consultant to help them adopt digital technology to improve factory management.

SCG also helped 300 SMEs and communities improve their job skills and develop new products in order to earn more revenue, he said.

SMEs can sell their products on SCG's online platforms and stores to expand their sales channels. Some SCG products such as paper were used to help hospital personnel cope with high levels of infections, said Mr Roongrote.

The company built 60,000 paper beds and supplied them to field hospitals, which were constructed to deal with the flood of Covid-19 patients, he said.

Applying its house construction and renovation expertise, SCG installed modular intensive care units and emergency rooms for hospitals facing facility shortages.

COMMUNITY SPIRIT

ESG principles play a major role in setting SCG's business direction, said Mr Roongrote.

The company will no longer keep feeding its factories with only new raw materials, employing some used materials for production, he said.

Its subsidiary SCG Chemicals is working with Unilever Thailand on a post-consumer recycled resin (PCR) project to reduce plastic waste that poses a threat to the ecosystem.

Their cooperation aims to replace Unilever's high-density polyethylene (HDPE) packaging bottles, used for shampoo and conditioner bottles, with recycled HDPE bottles for the first time in Thailand.

HDPE is a thermoplastic polymer, a type of petroleum-derived plastic that can be easily bent and moulded when heated at certain temperatures.

PCR is one environmentally friendly industrial operation SCG is carrying out to increasingly base its businesses on the circular economy model, said Mr Roongrote.

The government is promoting the bio-, circular and green economic model for business sustainability. A circular economy promotes an upcycling process to add value to unwanted materials, including used plastics, and make them usable again.

Business growth must go together with attempts to protect the environment and help community members improve their lives, he said.

Mr Roongrote said social responsibility is a core value of SCG. Its technological know-how will not only support businesses, but also communities, he said.

SCG is ranked first on the Dow Jones Sustainability Indices (DJSI) in the construction category. The company was eager to join DJSI, which was launched in 1999 to evaluate the global sustainability performance of companies.

SCG became the first company in Asean to have its performance assessed since 2004.

BUSINESS TRANSFORMATION

Mr Roongrote said to recover from the pandemic and maintain its business growth momentum, SCG plans to focus on two abilities -- resilience and agility -- in its business operations.

He said the pandemic and subsequent lockdown measures affected two of its three core businesses: cement and building materials as well as packaging businesses.

SCG's chemical business actually benefitted from the global economic recovery.

"SCG has businesses in Thailand and other Asean countries, and they bore the brunt of lockdowns," said Mr Roongrote.

The company adjusted by driving sales in markets less affected by the pandemic and focusing more on e-commerce, he said.

Marketing via digital platforms and mobile phone apps was another strategy to better serve demand and expand the customer base, said Mr Roongrote.

SCG also emphasised the development of high value-added products and services to better compete in markets, he said. This helped the firm earn 86.9 billion baht, or 34% of total revenue, during the first half this year.

Total revenue during the six-month period increased by 27% year-on-year to 255 billion baht, due mainly to higher prices of chemical products.

"We are confident we can get through the Covid-19 crisis because of our business strategy and quick adjustments to keep our businesses in line with global trends," said Mr Roongrote.

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