SCGP unveils expansion strategy focused on mergers & partnerships
Siam Cement Group Packaging (SCGP), Thailand's leading packaging producer, unveiled a business expansion strategy emphasising mergers and innovation on Tuesday.
The strategy is part of the company's effort to maintain growth after recording earnings of 112,559 billion baht in the first three quarters, a 26-per-cent rise from the same period last year.
The company’s continuous growth was the result of mergers and partnerships (M&A) in high-potential businesses, as well as chain integration to boost performance, CEO Wichan Jitpukdee told a press conference at SCGP headquarters on Tuesday.
M&A would therefore remain ACGP’s primary strategy for expansion in coming years, he said.
He added that as well as collaborating with innovative packaging solution firms, SCGP is looking to tap recycling companies, whether new or existing, to help drive long-term growth.
The firm recently completed M&P deals with Peute Recycling BV (Peute), a packaging material recycling company in the Netherlands, and Jordan Trading Inc (Jordan) of the US.
Wichan said that the collaborations with Jordan and Peute would hasten expansion of SCGP's international packaging recycling network.
Peute, and Jordan’s best practices would also lead to an improvement in the standard of recycling operations in the ASEAN region.
The firm recently partnered with three of Thailand's top medical supplies distributors to expand Deltalab's customer base throughout Asean in response to rising demand for healthcare and medical supplies.
SCGP will also prioritise the ESG4 Plus (Environment, Social, and Governance) framework for sustainability to achieve its net zero goal by 2050 and raise the percentage of environmentally friendly packaging that is recyclable, reusable, or compostable from 99.7 per cent to 100 per cent.
Rising revenue in the first nine months came from an increase in M&A and higher demand for food and beverage packaging as a result of the country's reopening and improved Covid-19 situation, said Wichan.
Earnings before interest, taxes and amortization (EBITA) were 15.848 billion baht, up 1 per cent from the same period last year.
However, profits fell by 13 per cent from the same period last year due to higher energy and raw material costs.
He said domestic consumption and tourism are expected to recover steadily in the ASEAN economy from the fourth quarter of 2022 to the first quarter of 2023.
"This will boost demand for essential goods such as food and beverages, as well as other consumer products, as orders are being prepared in advance of year-end festivities. Packaging would remain an important component of supply chain continuity to meet the region's growing consumer consumption," Wichan said.
However, he warned that a weaker-than-expected recovery in China may impact the Asean packaging industry, while global energy costs are expected to remain high.
He expressed confidence, though, that SCGP would meet its targeted sales revenue of 150 billion baht in 2022.
