SCG Ceramics reports Q2 and first half of 2020 results, surpassing COVID-19 crisis expectations

Prepares to focus on installation, decoration, and renovation business while addressing repair and construction market

 

SCG Ceramics has announced its Q2 and first half of 2020 results, exceeding expectations during the COVID-19 crisis. The company is preparing to focus on the installation, decoration, and renovation business while addressing the repair and construction market.
Although the COVID-19 crisis throughout Q2 has led to a decrease in sales both domestically and internationally, the company achieved a 95% increase in profit compared to the previous year due to effective management of distribution channels, reduced administrative costs by shifting more processes online, and quick adaptation to changing consumer behavior, along with lower energy costs compared to last year, resulting in better-than-expected performance this quarter.

 

Mr. Nampol Malichai, Managing Director of SCG Ceramics Public Company Limited (COTTO), a manufacturer and distributor of tiles under the COTTO, SOSUCO, and CAMPANA brands, disclosed the unaudited financial results for COTTO in Q2 2020, stating that the company had sales revenue of 2,369 million baht, a decrease of 15%. However, the company achieved a profit for the period of 41 million baht, an increase of 95% compared to the same quarter last year. For the first half of 2020, despite the economic slowdown due to the COVID-19 issue leading to sales revenue of 4,892 million baht, a decrease of 16% from the same period last year, the company still managed to achieve a profit for the period of 166 million baht, an increase of 10%, which was much better than expected.


Mr. Nampol stated, "The company experienced a decline in sales both domestically and internationally compared to last year, especially during the lockdown period when our main distribution channels, such as modern trade stores, were closed. However, due to our diverse distribution channels and effective management of each distribution method, we were affected but not excessively, as consumers could still access our products through various channels, including dealers, ceramic warehouses, and online platforms. Additionally, we collaborated with modern trade stores to stimulate sales through online channels during the store closures, resulting in an overall sales growth of 300% through this channel. The ceramic warehouse consistently exceeded sales targets every month, while most dealers maintained stable sales."


Regarding exports to the CLM markets, America, Europe, and Oceania, the impact varied depending on the severity of the COVID-19 outbreak in each area. However, during the past quarter, the company was able to continue production and shipment without interruption, resulting in Q2 performance being much better than expected. Currently, the export market is starting to improve in countries that are recovering, particularly in the CLM region.

As for the company's plans moving forward, Mr. Nampol revealed that the impact of the COVID-19 pandemic has changed people's lifestyles, especially consumer behavior, as they spend more time at home and are increasingly aware of cleanliness and safety within their homes. This presents a great opportunity for the company to introduce new products and services in the Health and Clean category to meet the needs of customers looking to enhance their living spaces for better health, safety, cleanliness, and peace of mind. In the past quarter, the company accelerated the launch of products to meet this customer segment, such as Hygienic Tiles from COTTO, which use silver nano technology in the tile composition to inhibit bacterial growth throughout the product's lifespan, unlike disinfectants that lose effectiveness quickly.


Moreover, the company has expanded its product portfolio to cater to the lifestyle of today's consumers, who prioritize not only cleanliness but also convenience, safety, and aesthetics. The company is focusing on developing products and services to meet customer needs, such as the Smart Flexible LT flooring by COTTO, which is beautifully designed, easy to install, quick, and environmentally friendly. Recently, the 4D+ tiles from CAMPANA and SOSUCO have been introduced, enhancing slip resistance for better safety while maintaining a soft and comfortable texture.
Importantly, to support customers looking to renovate their homes, the company has expanded its installation service business under the name C'TIS (Certified Tile Installation Service) to provide construction, repair, decoration, and tile installation services with a team of certified professional craftsmen.


"We started the tile installation business around the end of last year and received very positive feedback from various customers, including those looking to improve their homes, government agencies, and hospitals. From now on, we expect to expand into a broader construction, repair, decoration, and installation business beyond ceramic tiles, including composite aluminum for high-rise and general buildings, or resilient flooring materials such as Smart Flexible LT flooring by COTTO to target the home extension and small building market. Our target group includes homes in various projects. In the past, most customers preferred to use C'TIS services for garage extensions, swimming pool tiling, condominium flooring, and large tile decoration projects. Interested customers can inquire about details through the C'TIS or COTTO Life Facebook pages and local dealers. Currently, we have service points in Bangkok, Chiang Mai, Rayong, and Chonburi, with plans to open an additional 30 points nationwide within the next two years," Mr. Nampol stated.


Currently, C'TIS has a team of about 100 craftsmen providing construction, repair, decoration, and installation services, and is continuously recruiting more craftsmen to join the team. Training will be provided according to C'TIS standards, along with regular assignments for the craftsmen.


"We expect that the impacts will continue to affect the economy for some time, with several factors to monitor, such as the trend of infection numbers, the clarity of vaccine production, and the liquidity of the economic system. The ceramic tile market may inevitably be affected by the real estate sector and the reduced purchasing power of consumers. However, we believe that the domestic market situation will gradually improve as the government implements various measures to stimulate the economy, which is expected to help increase the demand for ceramic tiles and construction materials better than in the previous quarter. The company has prepared to plan production to manage stock in line with market demand and closely monitor consumer behavior. Additionally, we must watch the direction of COVID-19; if there is no second wave outbreak, we are confident that we will follow the recovery plan that the company has set out," Mr. Nampol concluded.
__________________________________________


SCG Ceramics Public Company Limited (COTTO) was established in August 2018 from the merger of five subsidiaries within the SCG (The Siam Cement Group) including:

(1) Thai Industrial Ceramics Co., Ltd. ("TCC")

(2) The Siam Ceramic Group Industries Co., Ltd. ("SGI")

(3) Sosuco and Group (2008) Co., Ltd. ("SSG")

(4) Thai-German Ceramic Industry Public Company Limited

(5) Gemaco Co., Ltd. ("GMG"). As a result, SCG Ceramics has become a leader in the country's tile industry, with a total of four production bases located in Saraburi province, with a maximum combined production capacity of 94 million square meters per year under three main brands: COTTO, SOSUCO, and CAMPANA.