In conjunction with the petrochemical trough, the industry has hit its lowest point in the cycle in 20 years. SCGC was impacted by the high cost of raw materials and excessive capacity addition causing oversupply. The cement and building materials business also faced skyrocketing energy costs. Nevertheless, SCGP is performing well despite energy fluctuations. Overall, SCG has a solid financial position due to its rigorous liquidity management and targeted investments in high-potential and sustainable businesses. SCG proactively entered into three new businesses: Renewable energy; ASEAN logistic, and smart living. The strategy seeks to improve quality of life and provide customers and society with convenience, affordability, safety, and environmental responsibility.

Mr. Roongrote Rangsiyopash, President and CEO of SCG, disclosed, “SCG's Q3/2022 operating results were significantly impacted by the energy prices that reached 10-year highs. This was the consequence of the Russia-Ukraine conflict, which has resulted in a significant increase in SCG's energy costs on top of the deepest petrochemical trough in 20 years. A global economic slowdown is expected as global interest rates rise. This will be exacerbated by China's economic downturn as a result of its Zero-COVID Policy”.

SCG is well-equipped to handle this recurring crisis while maintaining solid financial stability. It has scaled back costs and expenses, reassessed investments, and deferred new non-urgent projects. It has focused on leveraging projects with quick returns that are consistent with business expansion strategies, such as the LSP petrochemical project in Vietnam, whose construction progressed on plan and reached 97% completion. To further strengthen its financial position, debentures totaling VND21.88 billion were also issued in Q3/2022.

Furthermore, the company has accelerated the development of innovations to meet the needs of customers promptly by entering into three new businesses with high potential and addressing the needs of global megatrends.

Regarding renewable energy, SCG seeks to lower costs and speed up renewable energy development with satisfactory outcomes by employing biomass from agricultural byproducts and municipal solid waste (refuse-derived fuel or RDF) in place of fossil fuels. In Q3/2022, the cement operations in Thailand used renewable fuel for 40% of the total fuel used. Consequently, in nine months of 2022, the proportion of renewable fuel use climbed from 18% to 34% y-o-y and solar energy accounted for 195 megawatts. SCG also expanded into the solar energy business for residential and industrial estate sectors, namely SCG Solar Roof Solutions, and SCG Cleanergy Company Limited, with an output capacity of 29 megawatts. Electricity can be traded via a smart grid platform with leading customers both in the public and private sectors.

SCGC has recently entered into a joint venture agreement with Denka Company Limited, Japan, to produce acetylene black, material primarily used as a component in producing lithium-ion rechargeable batteries for electric vehicles (EVs) and used in applications for high-voltage transmission cables to generate electricity from offshore wind power.

With respect to ASEAN logistics, the company merged its logistics business and became ASEAN’s top integrated logistics and supply chain business, offering a wide range of services such as warehousing, cold storage systems, cargo services by land, sea, and air, docking services, import and export services, covering customers’ needs from end to end.

In regard to smart living, the business enhances the quality of life and provides customers and society with convenience, affordability, safety, and environmental responsibility.

In addition, SCGC continued to expand its production capacity of high-quality post-consumer recycled resin SCGC GREEN POLYMER at Sirplaste, Portugal, after acquiring a 70% stake, to supply the markets in Europe and Africa. Concurrently, SCGP expanded its investment in the high-quality medical supply market (Deltalab, S.L.) in Spain to export to global markets. It also expanded its packaging materials recycling business, which is in high demand and is aligned with environmentally responsible trends, such as acquisitions of Peute Recycling B.V. (Peute) in the Netherlands, and Jordan Trading Inc. (Jordan) in the United States.

SCG's unreviewed operating results for Q3/2022 registered revenue from sales of VND91.75 trillion (US$3.9 billion), a drop of 7% q-o-q, due to lower chemical’s product prices driven by softer petrochemical’s demand due to the trough of chemicals business. Profit for the period was at VND1.58 trillion (US$67 million), a decrease of 75% q-o-q largely attributable to lower chemical’s spreads, higher energy costs, together with lower seasonal dividends. However, on a y-o-y basis, revenue from sales has climbed by 8%, mostly due to higher product prices in line with the market of cement and building materials business and SCGP. However, profit for the period declined by 64% y-o-y due to lower chemical’s spreads and lower equity income.

In nine months of 2022, SCG registered revenue from sales of VND298.61 trillion (US$12.92 billion), a rise of 15% y-o-y. This is owing to higher sales across all businesses mainly from higher product prices in line with the market. Profit for the period totaled VND14.17 trillion (US$613 million), down 45% y-o-y, as a result of higher feedstock and energy costs as well as lower equity income in the chemical business.

SCG has modified its HVA products and services strategy by tightening the criteria to increase product competitiveness in the global market. The efforts are to keep up-to-speed in launching products in response to the rapid change in customer’s needs and to increase profitability. Under the new criteria, SCG's sales of HVA products and services in 9 months of 2022 amounted to VND102.04 trillion (US$4.42 billion), and accounted for 34% of total revenue from sales. Furthermore, the proportion of new product development (NPD) and service solutions accounted for 17% and 6% of total revenue from sales, respectively.

In addition, SCG's revenue from operations outside of Thailand, including export sales from Thailand in nine months of 2022 registered VND135.57 trillion (US$5.87 billion), or 45% of total revenue from sales, equivalent to the same period last year.

For SCG’s operation in ASEAN (ex-Thailand), the revenue from sales in Q3/2022 recorded a 12% increase y-o-y, amounting to VND26.07 trillion (US$1.11 billion), and 28% of SCG’s total revenue from sales. This includes sales from both local operations in each ASEAN market and imports from the Thai operations.

As of 30 September 2022, the total assets of SCG amounted to VND584.5 trillion (US$24.53 billion), while the total assets of SCG in ASEAN (ex-Thailand) were VND269.45 trillion (US$11.31 billion), 46% of SCG’s total consolidated assets.

The company reported Q3/2022 revenue from sales at VND9.96 trillion (US$424 million), up 18% y-o-y mainly from export sales from Thailand to Vietnam.

In parallel with ESG principles, SCG continues sponsorships in Ba Ria-Vung Tau with VND1 billion provided to the Association for Promoting Education, assisting underprivileged children’s education. Also, the company supported meaningful back-to-school activities for the province’s School for Disabled Children, as a long-term commitment to the local community.

To support young generations on environmental conservation, SCGP Packaging Design Contest - Speak Out Challenge was carried out to give an opportunity for members of Gen Z to showcase creative packaging design abilities and play a part to make a difference in the world and environment. The contest champions the mission to promote the growth of the packaging design industry and redefines a better normal for future generations. Moreover, SCG further engaged with the participants of the previously held Hacks To Heal Our Planet contest by awarding top outstanding ideas.

Mr. Roongrote said, "This crisis is incredibly challenging, but we are confident that SCG will overcome it and emerge stronger than ever thanks to our strategies, which include making timely adjustments to business plans, reducing costs, delaying non-urgent investment projects, and adjusting production plans to meet market demands. Meanwhile, we also invest more in new businesses with high potential (New S-Curve). For SCGP, its investment portfolio companies continue to expand healthily.

SCG's financial position and cash flow remain robust due to less investment burden as the LSP project is now 97% completed. Through constant communication with employees, suppliers, partners and customers, we have excellent collaboration to get through this crisis."