Mr. Namphol Malichai, Managing Director of SCG Ceramics Public Company Limited (COTTO), a manufacturer and distributor of tiles under the brands COTTO, SOSUCO, and CAMPANA, announced the preliminary financial results for COTTO in the third quarter of 2020. The company reported sales revenue of 2.64 billion baht, a decrease of 3% compared to the same period last year, attributed to the impact of the COVID-19 pandemic on both domestic and international economies, leading to a reduction in sales volume and a slight decrease in average selling prices.

Despite this, the company still achieved a profit of 171 million baht, an increase of 96% compared to the same period last year, due to effective cost management and continuous improvements in production efficiency, along with reduced energy costs from lower natural gas prices.

Mr. Namphol stated, "Recently, the COVID-19 pandemic has affected the real estate sector, and market demand remains weak due to lockdown measures, which have also impacted the ceramic market. However, considering that our sales in this quarter decreased by only 3% compared to last year, we still have a satisfactory profit margin in a challenging external environment. We are focusing on strict internal controls, particularly in cost reduction and production efficiency enhancement."

Additionally, the company has been affected by exports to CLM countries due to the COVID-19 outbreak in Myanmar, which has implemented measures to limit the number of goods transport vehicles entering the country and strict border control measures in other areas, impacting cross-border transportation. The recent lockdown measures in Myanmar have also directly affected sales. Nevertheless, the company has been closely monitoring the situation and continuously adjusting its export strategies in each area to adapt to rapidly changing circumstances.

In terms of key operational strategies for this quarter, the company continues to focus on expanding sales channels to cover all target consumer groups through various offline and online channels, including dealer stores, modern trade, and ceramic warehouses. This quarter, the company has gradually opened new "Ceramic Warehouses" as planned, with 35 branches currently operational, and expects to reach its target of 42 branches by the end of the year.

"Although the ceramic market in this quarter is still sluggish and is likely to contract further due to the real estate and construction market situation, we are committed to increasing the number of 'Ceramic Warehouses' as planned, while striving to keep the costs of each branch as low as possible. Our main strategy is to create diverse sales channels, whether through dealer stores, retail shops, modern trade, and COTTOLife online. This not only benefits consumers by making it easier for them to access and purchase products but also increases sales opportunities and generates revenue for the company, as well as serving as a channel for introducing new products and services," Mr. Namphol added.

To align with the domestic market conditions, as the real estate sector contracts due to purchasing power, the ceramic market has also slowed down. The company is therefore accelerating its plans to expand service offerings and new products beyond ceramic tile sales, including the LT Smart Flexible flooring, which is an aesthetically pleasing, easy-to-install, quick, and environmentally friendly flooring material, as well as installation services under the name C'TIS (Certified Tile Installation Service). Both businesses have started to grow and generate revenue for the company.

"Consumers still have a demand for other surface materials beyond ceramic tiles, both in terms of products and installation services. The renovation and improvement market for existing homes is still viable as consumers are opting to renovate rather than build or buy new homes. This presents an opportunity for the company to accelerate the development and selection of new products and offer additional installation services to seriously enter this business, as we are now ready in terms of products and have a team experienced in installing various surface materials," he said.

Furthermore, the company has begun to seriously expand its energy business under the brand "SUSUNN" to provide consulting, design, distribution, and installation of renewable energy power generation systems, particularly solar energy systems, as well as services for designing and planning automation systems and management in factories in line with Industry 4.0, as well as establishing management systems for industrial estates nationwide.

"The company has an Engineering Solution Business team consisting of experts in engineering and renewable energy who have received energy conservation awards both domestically and internationally from various institutions for a long time. We see this as an opportunity to develop a new business since we are well-prepared in terms of our team and the renewable energy business has high growth potential. Currently, we have a customer base of industrial factories and large buildings that require significant energy use, and we expect this to be another business that will generate revenue for the company and continue to grow in the future," Mr. Namphol concluded.