SCG Decor PCL (SCGD) debuts on SET with largest IPO of the year

  • Unveiling Investment Plans, Aiming for Growth in the ASEAN Market

SCG Decor PCL (SET: SCGD) debuted on the SET with the largest IPO of the year. The company is advancing its investment plan to foster stronger growth while implementing a strategy to grow its business by expanding into the decorative surface materials and sanitary ware markets in the ASEAN region.

Mr. Numpol Malichai, CEO and President of SCG Decor PCL (SCGD), reported that the company successfully traded its shares (SET: SCGD) for the first time on December 20, 2023, on the SET under the construction materials category. This significant move is part of the strategic restructuring of SCGD’s business to position itself as the core company within the SCG group, focusing on decorative surface materials and sanitary ware products. It aims to strengthen its financial position to support business expansion plans, ensure working capital for ongoing operations, and adjust capital structures. With over 40 years of experience and expertise in the industry, SCGD is confident that its plans to expand into the decorative surface materials and sanitary ware markets in the ASEAN region will drive robust growth.

The company has continuous plans for investment expansion, having already invested in various projects. These include initiatives such as:
1. Investments to reduce energy costs and enhance production efficiency, such as installing solar power generation systems in factories utilizing biomass for hot air production in the production powder for tile manufacturing in Thailand, Indonesia, and Vietnam to reduce natural gas and coal consumption; reusing heat from furnaces in the production processes in Vietnam and the Philippines; upgrading production lines and kilns to accommodate new products and improve efficiency.
2. Production line investment projects, including establishing a state-of-the-art SPC tile factory in Saraburi; expanding the production capacity for large-sized tiles and glazed porcelain in Vietnam; studying plans for setting up a new sanitary ware factory.

The company sees opportunities to expand the market for sanitary ware and a diverse range of decorative surface material products in the ASEAN region. This market has great growth potential due to economic trends, growing population, and rising incomes. The company has formulated key strategies for business expansion, including:

1) Expanding the sanitary ware business in ASEAN by leveraging strong production bases in Thailand, sourcing products from China and Vietnam, accepting a broad range of branded products, and expanding its retail and online channels, including distributor networks in Vietnam.
2) Strengthen Thailand’s decorative surface materials business and expand it to ASEAN. This involves increasing sales of High-Value Added (HVA) products, studying investment plans for tile factories in southern Vietnam, expanding markets through SCG’s sales channels, expanding the SPC tile market in ASEAN, and investing in projects to expand and enhance production efficiency.
3) Expanding related products and services to reinforce leadership in comprehensive surface decoration and sanitary ware services. This includes adding to the product portfolio and collaborating with potential partners in ASEAN.
4) Managing the production supply chain efficiently, focusing on cost management, sourcing, and improving production efficiency towards a Smart & Green Factory to enhance profit-making capabilities.
5) Sustainable growth through developing eco-friendly products and environmentally friendly production processes. The company aims to increase the proportion of SCG Green Choice products to 80% of sales by 2040 and strives towards Net Zero Carbon by 2060.

Although the company’s performance in the first 9 months of 2023 slightly lagged compared to the same period in the previous year, given the real estate situation in Vietnam, with revenue from sales at 21,522 million baht and a net profit of 760 million baht (after adjusting for non-recurring items), in the third quarter of 2023, the company achieved revenue from sales of 7,186 million baht and a net profit of 280 million baht (after adjusting for non-recurring items), representing an increase of 1.1% and 22.9%, respectively, compared to the previous quarter. This reflects an overall improvement in the economy, having passed its lowest point, and a positive trend in the market for the upcoming year. The company maintains a robust financial position, with a net debt-to-equity ratio of 0.3. Additionally, the gradually decreasing natural gas prices have positively impacted the company’s production costs.

Mr. Pichet Sithi-Amnuai, President of Bualuang Securities Public Company Limited, acting as financial advisor and underwriter, stated that SCGD is a robust company in various dimensions. It is a leader in the decorative surface and sanitary ware products business in the ASEAN region, holding the number one market share for ceramic tiles in Thailand, Vietnam, and the Philippines. Moreover, it is also the top market share holder for sanitary ware products in Thailand. The company is recognized and accepted across the ASEAN region, covering a wide customer base. It has a skilled product design and development team, modern production processes and technologies, comprehensive regional distribution channels, and is committed to sustainable growth under ESG principles.

The SCGD IPO is considered the largest this year, with a market capitalization of 18,975 million baht at the IPO price. The securities have recently been registered on the Stock Exchange of Thailand, replacing COTTO, which was delisted following its business structure adjustment plan. The IPO includes the first-ever offering to the general public and an offering to existing COTTO shareholders, involving 439,100,000 shares, equivalent to 26.61% of the company’s total issued and paid-up ordinary shares. The offering has received positive responses from investors and existing COTTO shareholders who responded well to the share purchase offer.

Distributed by MT Multimedia Co., Ltd. on behalf of SCG Decor PCLi (SCGD)
For more information, please contact Thiyaporn Sriadunphan (Dah)
Tel: +66 87 556 6974 l, Email: thiyaporn.s@mtmultimedia.com

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