SET-listed Siam Cement Group (SCG), Thailand's largest cement maker and industrial conglomerate, is bracing for an economic slowdown by focusing on three key businesses and partnering with JWD InfoLogistics Plc to expand its logistics market in Asean.
Logistics, renewable energy and smart living businesses are gaining more support from the company, which wants to grow sustainably amid uncertain economic conditions, said Roongrote Rangsiyopash, president and chief executive of SCG.
"We expect the three businesses to add more revenue in the future and keep us strong," he said.
The prolonged Russia-Ukraine war, which is blamed for driving up energy prices, and China's zero-Covid policy have affected the global economy, while the global petrochemical industry hit its lowest point in 20 years, said Mr Roongrote.
According to SCG, its energy costs soared by around 50% after the start of the war, dealing a blow to business operations, especially in the third quarter.
From July to September, its revenue decreased by 7% quarter-on-quarter to 142 billion baht, mainly attributed to lower prices of chemical products.
Profit plunged by 75% quarter- on-quarter for the period and fell 64% year-on-year to 2.4 billion baht.
To increase revenue through logistics business expansion, its subsidiary SCG Logistics Management Co recently merged with JWD InfoLogistics, becoming the largest integrated logistics and supply chain solution provider in Asean.
The merger led to the establishment of SCGJWD Co. The move is expected to help grow revenue by 10-12% a year, or around 25-26 billion baht annually.
In the renewable energy sector, subsidiary SCG Cleanergy Co plans to increase its electricity generation capacity from renewable energy sources to 500 megawatts in 2-3 years and 5,000MW within five years, up from 220MW at present.
"We are seeking to invest in rooftop solar panels, floating solar farms and wind energy," said Mr Roongrote.
As for the smart living business, SCG Chemicals Plc formed a joint venture with Japan-based Denka Co to make acetylene black, a type of carbon black that is highly conductive. The material can be used in making lithium-ion batteries for electric vehicles and high-voltage power transmission cables for offshore wind power generation.
In 2022, SCG decided to decrease its investment budget from 80 billion baht to 55 billion and delay some investment projects, including merger and acquisition plans, during the global economic slowdown.
Mr Roongrote expects SCG's total revenue to grow by 10% this year, up from 541 billion baht last year.