SCG Ceramics has shown robust growth in the first half of 2022, in line with its plans, and is prepared to handle challenges and risks while accelerating the push for innovative products and alternative energy solutions to navigate both opportunities and fluctuations in the second half of the year.

In the first half of 2022, SCG Ceramics reported a 4% increase in profit and a 17% rise in sales, with a 19% sales growth in the second quarter. Despite facing rising energy and raw material costs that have impacted profits, the company remains confident in the growth of its core customer base both domestically and internationally. It is accelerating the development of distribution channels in collaboration with distributors, modern trade stores, online platforms, and ceramic warehouses to reach customers across all segments and regions. The market is expected to slow down in the second half of the year compared to the first half, partly due to seasonal factors, but it is anticipated to perform better than last year, providing opportunities to promote HVA products and the SUSUNN alternative energy brand.

Mr. Namphol Malichai, Managing Director of SCG Ceramics Public Company Limited, or COTTO, which manufactures and sells tiles under the COTTO, SOSUCO, and CAMPANA brands, revealed that the company achieved sales revenue of 6.606 billion baht in the first half of 2022, a 17% increase from the same period last year. The profit for the half-year period was 378 million baht, a 4% increase, close to expectations, due to effective management of administrative costs and continuous improvements in production efficiency, as well as adjustments in average selling prices to align with rising energy costs to mitigate the impact of increased production costs.

For the second quarter of 2022, Mr. Namphol stated that sales revenue continued to grow compared to the same period last year and the previous quarter, with sales revenue of 3.376 billion baht, a 19% increase driven by sales in both the domestic and international markets. Exports have also shown good growth, particularly in Myanmar, Cambodia, and Laos. However, the company reported a profit of 167 million baht for the quarter, a 6% decrease compared to the same period last year, primarily due to continuously rising energy and raw material costs since the beginning of the year.

Mr. Namphol stated, "We anticipate that the construction and building materials industry will continue to expand in 2022, despite higher costs, and the housing market in the second half of the year will gradually recover. The middle-to-upper consumer segment still shows demand for housing, with a shift in purchasing behavior towards seeking more spacious single-family homes outside urban areas. Additionally, the project-based customer segment, both medium and large-scale, remains a significant and expanding customer base for the company.

Key factors affecting business operations, in addition to rising energy and raw material prices, include challenges such as significantly rising inflation, which increases the cost of living and pressures consumers to delay housing purchase plans despite ongoing demand. Additionally, currency fluctuations and rising transportation costs linked to energy prices are also concerns. The company has been closely monitoring the situation to appropriately plan production and manage its product portfolio, as it is both an importer of ceramic tiles and one of the leading exporters in the country.

However, in the second half of the year, there are also positive factors for the building materials market, including measures to open the country, which are crucial for stimulating the economy and gradually reviving the tourism sector. Therefore, the company is confident that it can continue to grow compared to last year in the second half.

Despite ongoing and rapidly changing external factors impacting the business, the company believes that its proactive business management and close monitoring of the situation will allow it to maintain competitiveness through various strategies, including cost management and risk reduction by aligning production planning with market demand and core customer segments, systematic inventory management, and utilizing technology to enhance production efficiency, especially technologies related to renewable energy and alternative energy for savings and reduced energy consumption.

Additionally, the company is continuously implementing its plans, particularly in developing distribution channels in collaboration with distributors, modern trade stores, and online platforms to facilitate access for all customer segments and regions. It is also expanding its retail ceramic tile store branches, or "ceramic warehouses," and developing new collaboration models with distributors to accelerate branch expansion to cover target areas as per the annual plan, while adjusting product prices to align with market mechanisms. The company avoids price competition and focuses on creating differentiation through product quality and services that best meet customer needs.

“In the last quarter, our product presentation at Architect’65 received positive feedback after a two-year hiatus due to the COVID-19 situation, especially for innovative products in the Health and Clean category that cater to current consumer lifestyles and products in the ECO Collections category that reduce the use of new resources by up to 80%.

Looking ahead to the economic recovery in the second half of the year, coupled with the growing awareness of health, well-being, and the importance of alternative energy, it presents a great opportunity for the company to accelerate the promotion and introduction of innovative products and services with added value to penetrate the new lifestyle market that prioritizes health and well-being, along with a commitment to offering eco-friendly innovations that contribute to environmental care through the SUSUNN brand, which provides consulting, design, distribution, and installation of various types of renewable and clean energy systems.

Recently, the COTTO brand has been awarded Thailand’s Most Admired Brand 2022 for the 11th consecutive year as the most trusted brand in the ceramic floor and wall tile category, according to consumer surveys by BrandAge magazine. This recognition serves as a commitment for us to continuously develop products and services to meet customer needs and contribute to improving the quality of life for people, society, and the environment sustainably, in return for the trust our customers have placed in us over the years,” Mr. Namphol concluded.