SCG announced its Q1 2025 operating results, showcasing a significant improvement from the previous quarter with a profit of 1,099 million baht driven by better performance across all business units. Backed by robust cash flow (EBITDA) of 12,889 million baht and continuous financial strengthening measures, the company has elevated its response to the escalating global trade war with a decisive “4-Pronged Strategy,” expressing confidence in maintaining stability and growth amidst ongoing challenges.
Bangkok, Thailand – SCG, one of Southeast Asia’s leading conglomerates, released its financial performance for the first quarter of 2025 (January-March), signaling a clear recovery despite volatile global economic conditions and heightened trade tensions. The company reported a profit for the period of 1,099 million baht, a turnaround from the 512 million baht loss recorded in Q4 2024. This positive shift was attributed to improved performance across all core business segments and the successful implementation of ongoing financial resilience measures.
Mr. Thammasak Sethaudom, President & CEO of SCG, stated, “In Q1 2025, SCG achieved a profit of 1,099 million baht as all businesses showed improvement, driven by continuous financial strengthening measures. We accelerated efforts to enhance competitiveness by reducing production and administrative costs, alongside effectively expanding into new markets.”
Key contributing factors included increased demand in the cement-related and construction businesses, aligning with the typical construction season and sustained government budget disbursements. Concurrently, SCG Chemicals (SCGC) demonstrated better performance through effective cost management and strategic product portfolio adjustments. SCG Packaging (SCGP) also maintained its strength by focusing on growth to meet domestic consumer demand within ASEAN, enhancing its consumer packaging portfolio while managing costs efficiently.
Robust Cash Flow Reflects Financial Discipline
Beyond the profit recovery, a standout aspect of the quarterly results was the continued strength in Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA), which stood at 12,889 million baht. Although this represented a 15% decrease from the previous quarter, the primary reason was lower dividend income received from investments in other businesses (SCG Investment) compared to Q4 2024. Focusing purely on core operational performance, EBITDA from Operations reached 11,752 million baht, marking a significant 22% increase from the previous quarter. This highlights the company’s swift adaptation and underlying business efficiency in navigating challenges.
This achievement stems from the rigorous and consistent application of financial strengthening measures. Prudent management of cash flow, costs, and working capital enabled SCG to reduce its net debt to 290,504 million baht by the end of Q1 2025, significantly boosting business liquidity.
Confronting the Trade War with a Proactive 4-Pronged Strategy
Despite the positive results, SCG acknowledges the fragile global economic landscape, particularly the impact of the intensifying US-led trade war involving tariff hikes. This situation prompted the International Monetary Fund (IMF) to recently downgrade its global economic growth forecast for the year to just 2.8%, with nearly all countries seeing reduced GDP estimates, including Thailand’s forecast being lowered to 1.8%.
Mr. Sethaudom elaborated on SCG’s assessment of the trade war’s impact: “The direct impact on SCG is minimal, as exports to the US accounted for only 1% of total sales in 2024. However, the indirect impact is more concerning. If the 90-day suspension period for US import tariff collection expires, countries with trade surpluses with the US might face varying tariff rates. Thailand, in particular, could face import tariffs as high as 36%, as announced by the US on April 2, 2025.” Such a scenario, he warned, could lead to a severe slowdown in regional and global economies, potentially shrinking international exports and causing an influx of goods from other countries into Thailand, thereby intensifying competition.
While challenges loom large, Mr. Sethaudom pointed out hidden opportunities. “The trade war creates global pressure, but opportunities exist, such as the trend of lower global oil prices, challenges faced by Chinese petrochemical producers in sourcing US raw materials, and sustained high purchasing power in some markets for High-Value Added (HVA), Green, and Quality Affordable Products (QAP).”
In response to this complex environment, SCG has intensified its adaptation efforts by launching a comprehensive “4-Pronged Strategy” to navigate the anticipated global economic slowdown. These strategies, applied across all SCG businesses, are:
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Reduce Costs, Compete with Global Producers: This strategy focuses on enhancing cost competitiveness to counter low-priced goods from other countries. It involves lowering production costs (Operation Cost) through measures like merging production lines, improving efficiency, streamlining processes, and significantly increasing the use of Robotic Automation. Examples include SCG HEIM using intelligent robots for precise assembly of earthquake-resistant modular homes and SCG Decor employing high-pressure casting machines and robotic glaze spraying systems for COTTO sanitary ware production.
Furthermore, SCG aims to reduce administrative costs (Admin Cost) by expanding the use of AI for organizational efficiency, such as in procurement processes or predictive maintenance. A key component is also the continuous optimization of working capital across the supply chain. Additionally, increasing the use of clean energy, such as solar power and biomass, enhances efficiency, lowers costs, boosts competitiveness, and supports sustainability goals. In Q1 2025, SCG increased its alternative fuel usage in cement production in Thailand to 44% of total fuel consumption.
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Expand Product Portfolio to Cater to All Market Levels: SCG will continue developing HVA and Green Products tailored to market needs, such as large-format glazed porcelain tiles and SCG Low Carbon Cement (currently developing Gen 3, capable of reducing carbon emissions by approx. 40%, targeted for launch in decorative cement products in Q4 2025). Simultaneously, the company will increase its focus on “Quality Affordable Products” (QAP), which cater to high-demand segments and offer immediate profitability. Examples include the SCG Solar Roof system with various price packages, the cost-effective and durable SCG Celica Curve ceramic roof tiles, popular SCG concrete paving blocks, and agricultural PVC pipes designed specifically for farmers’ needs.
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Penetrate New High-Potential Markets: Leveraging SCG’s extensive global business network, this strategy involves expanding exports of products like low-carbon cement, concrete tiles, smart boards, packaging paper, and food packaging into new markets demonstrating high potential and demand, particularly countries adapting to or benefiting from trade war dynamics.
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Create Advantage from ASEAN Production Base: Capitalizing on SCG’s strong manufacturing presence across multiple ASEAN countries, this involves strategically shifting production and exports away from countries facing higher US import tariffs towards those with lower rates. This diversified base, a key SCG strength, enhances flexibility and responsiveness to customer needs. For instance, SCGP’s packaging can be produced and exported from Thailand, Vietnam, Indonesia, and the Philippines, while low-carbon cement and glazed porcelain tiles can be sourced from both Thailand and Vietnam.
Business Unit Performance and Future Outlook
Analyzing individual business units, SCG Chemicals (SCGC) reported an EBITDA of 2,579 million baht, an 80% jump from the previous quarter, driven by improved petrochemical spreads and higher PVC sales volume. However, it still posted a net loss of 2,948 million baht, though this was an improvement from the prior quarter’s loss, partly due to reduced losses from the Long Son Petrochemicals (LSP) project. Despite market uncertainties and slowing chemical demand, SCGC anticipates potential benefits from lower global oil prices reducing production costs. The unit remains vigilant, proactively managing costs, enhancing supply chain flexibility, and preparing the LSP project in Vietnam to resume operations when conditions permit.
The Cement and Building Materials group showed positive results. SCG Cement and Green Solutions saw EBITDA rise 54% quarter-on-quarter to 3,703 million baht, with profit surging 506% to 1,443 million baht, benefiting from the construction season and higher cement prices. SCG Smart Living and SCG Distribution & Retail reported an EBITDA of 1,151 million baht, recovering from a loss in the previous quarter, and a profit of 751 million baht, driven by restructuring-related cost savings and demand from government and non-residential projects.
SCGP (Packaging) recorded an EBITDA of 4,234 million baht and a profit of 900 million baht, both decreasing compared to the same period last year. SCG Decor reported an EBITDA of 808 million baht and a profit of 217 million baht, also showing year-on-year declines.
Focus on HVA and Green Choice Drives Sustainable Growth
SCG maintains its commitment to developing High-Value Added (HVA) products and services and environmentally friendly SCG Green Choice offerings. In Q1 2025, HVA products generated 37,709 million baht, accounting for 38% of total revenue from sales. Impressively, SCG Green Choice products contributed 64,540 million baht, representing 52% of total revenue from sales, underscoring the company’s dedication to sustainable growth and meeting global market demands.
Leaving No One Behind: Supporting SMEs
Concluding his remarks, Mr. Sethaudom emphasized SCG’s concern for Small and Medium-sized Enterprises (SMEs), recognizing them as the backbone of the grassroots economy and significantly impacted by the global trade war. “SCG is ready to collaborate with all sectors, share knowledge, enhance capabilities, and help businesses adapt and compete through the ongoing ‘Go Together’ project, which will reach its initial phase target of 1,200 participants this May, and the ‘NZAP’ project with 106 participants already engaged. Through mutual cooperation and support, we can overcome these challenges together.”
Overall, SCG’s Q1 2025 performance demonstrates resilience and financial strength amid a challenging global business environment. The company’s proactive implementation of its 4-pronged strategy, combined with effective internal management, positions it well to navigate ongoing uncertainties and pursue sustainable growth in the future.
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