SET-listed Siam Cement Group (SCG), Thailand's largest cement producer and industrial conglomerate, has decided to revise down its revenue growth target to 10% this year, down from 20% due to a raft of factors, including the domestic economic slowdown and sluggish sales in the petrochemical industry.
On Thursday the company did not reveal its estimated total revenue for the whole year, reporting only earnings between January and June.
"In the first half of 2024, revenue was 252.4 billion baht, close to last year's figure," said Thammasak Sethaudom, president and chief executive of SCG.
The company experienced a decline in sales from businesses related to cement and construction, affected by weak market conditions in Thailand, despite an increase in sales from their subsidiaries SCG Chemicals and SCG Packaging.
The sales composition included 39% from SCG Chemicals, 27% from SCG Packaging, 16% from SCG Cement and Green Solutions, 13% from SCG Smart Living & SCG Distribution and Retail, and 5% from SCG Decor.
Profits during the six-month period stood at 6.1 billion baht, a decrease of 75% year-on-year due to fair value adjustments of investments in the first half of 2023, amounting to 14.8 billion baht.
SCG decided to shut down some of its businesses with no growth potential, including a goods delivery business under the "Black Cat" brand, run by SCG Logistics Management Co in partnership with Japan-based Yamamoto Transport Co.
Mr Thammasak expects the overall economic landscape to remain challenging in the second half of 2024.
"The trade war, the impact of geopolitical conflicts, intense market competition from the import of Chinese goods and a slow domestic economic recovery have dealt a blow to the business sector, not just SCG," he said.
The company is using a variety of measures to help it get through economic uncertainties.
Among them is a focus on businesses with strong growth potential such as comprehensive solar energy solutions for residential markets, plants, and industrial estates as well as energy cost management in the cement business in Thailand, which increased the use of alternative fuels to 47% of total fuels, said Mr Thammasak.
SCG will also stop producing regular building materials and focus instead on green products in the construction sector to support its carbon dioxide emission reduction campaign.
