SCG Ceramics Reports Q2 and First Half of 2019 Earnings: Profits Defy Trends, Focus on Sustainable Business Growth and Renewable Energy Innovations

          SCG Ceramics achieved a profit of 113 million baht in Q2 2019, exceeding the first quarter, before accounting for retirement benefit expenses under the new Labor Protection Act. The company is committed to strengthening its business foundation for sustainable development. Recently, it received the Thailand Best Energy Award 2019 for energy conservation and has elevated its product quality standards by becoming the first and only ceramic tile manufacturer in the country with a certified quality testing laboratory under the new ISO/IEC-17025 standard.

          Mr. Nampol Malichai, Managing Director of SCG Ceramics Public Company Limited (COTTO), which produces and sells tiles under the COTTO, SOSUCO, and CAMPANA brands, revealed the unaudited financial results for COTTO in Q2 2019. The company reported sales revenue of 2,790 million baht, a decrease of 5% compared to the same period last year and a 7% decrease from the previous quarter. The profit was 21 million baht, an 11% increase from the same period last year but an 84% decrease from the previous quarter. This was primarily due to the provision for expenses under the new Labor Protection Act, which increased retirement compensation from 300 days to 400 days, necessitating a reserve of 124 million baht for this quarter.

          “In this quarter, the company was able to achieve a profit of approximately 113 million baht, but due to the need to set aside provisions for expenses under the new Labor Protection Act, which increased retirement compensation from 300 days to 400 days, the profit decreased from the first quarter,” Mr. Nampol stated.

          For the first half of 2019, SCG Ceramics reported sales revenue of 5,802 million baht, a 4% decrease from the same period last year, attributed to lower average selling prices. The profit for the period was 151 million baht, a 182% increase from the same period last year, driven by profits from land sales in the Nong Kha Industrial Estate.

          Mr. Nampol commented, “In the past quarter, there were no positive factors. Consumer purchasing and investment in real estate slowed as they awaited the government's direction and the domestic situation, impacting ceramic sales and resulting in zero growth in the domestic ceramic market. Additionally, conflicts in major economies have led to a global economic slowdown and intensified competition from imported products, affecting selling prices. However, the company was able to reduce operational costs according to its improvement and production efficiency plans, allowing it to remain competitive and profitable.”

          In the CLM market, Myanmar and Cambodia continue to grow, but there are signs of project delays in Cambodia. The Lao market shows signs of slowdown due to the government's ongoing deficit and the depreciation of the kip. In other international markets, competition has intensified due to an increase in products amid a slowing economy.

          Mr. Nampol stated, “The company has plans to expand exports to CLM countries. In the past quarter, we successfully penetrated the market and expanded our customer base, even though the strengthening of the baht has affected consumer purchasing power. As a result, sales in the CLM market increased by 10% compared to the same period last year. However, the strengthening of the baht has reduced our export potential to other countries and intensified competition from imported products.”

          Regarding important operational strategies, the company continues to focus on sustainable business practices, particularly in maintaining and enhancing product quality standards alongside brand development. Mr. Nampol emphasized, “To build a brand that remains in consumers' minds sustainably, it is crucial for the company to maintain and elevate product quality standards, which is a significant strength of the brand recognized and accepted by consumers. Every manufacturing facility has a certified quality testing laboratory under the ISO/IEC-17025 standard, which ensures that the testing results are academically reliable.”

          “Recently, the testing laboratory at SCG Ceramics in the Khaeng Stone Factory became the first in the SCG construction materials group to receive the new ISO/IEC-17025-2561 certification. In Thailand, there are only three laboratories that have received this certification, and SCG Ceramics is the first and only ceramic tile manufacturer in the country to be certified, reinforcing confidence and credibility in product quality testing, which is a key factor in gaining acceptance from customers both domestically and internationally.”

          Regarding the progress of significant energy cost reduction projects, particularly renewable energy projects, the “Floating and Rooftop Solar Power Generation System Project to Enhance Water Production Efficiency at Nong Kha Industrial Estate” recently received the Thailand Energy Awards 2019 for renewable energy in the Off-Grid project category.

          The solar power generation project consists of two systems: rooftop and floating. The highlight is the floating solar power generation system, which can produce 9% more electricity than the rooftop system and reduces water evaporation in the pond by 7%, resulting in a 14% reduction in external electricity consumption from a total installation capacity of 160 kW. This project aims to explore renewable energy that does not impact the environment, utilizing the Nong Kha Industrial Estate office area as a pilot project with multiple installation sites for solar power generation, including the rooftops of buildings and the water pond behind the office, which is now open as a learning resource for the surrounding community on solar cells.

          Mr. Nampol stated, “This project is managed by the Energy Solution Services team of SCG Ceramics, which combines experts in engineering and renewable energy. They provide consulting services, sales, and installation of various renewable energy power generation systems, particularly solar systems, to external agencies. Last year, we began generating revenue from this unit. Previously, this team has won awards both nationally and internationally, including the Thailand Energy Awards for five consecutive years from 2010 to 2014, as well as two ASEAN awards in 2010 and 2014.”

          “SCG Ceramics continues to focus on efficient energy management and the continuous development of renewable energy innovations, recognizing that this is crucial for the company’s competitiveness and sustainable growth. Additionally, reducing resource consumption, especially natural resources, and minimizing environmental impact is a demonstration of social responsibility in line with SCG's long-standing principles,” Mr. Nampol concluded.


Thank you for the information from scgceramics.com