SCG Packaging Public Company Limited (SCGP) received the Best IPO Retail Investor Award from Alpha SEA’s Best Deal & Solutions Awards 2020 which was organized by Alpha Southeast Asia, a leading investment magazine in ASEAN’s capital market. The award reaffirms the success of SCGP’s initial public offering (IPO), with a distribution of shares covering a diverse group of investors. The company debuted shares on the Stock Exchange of Thailand in October 2020. This award also represents the trust, the satisfaction and the recognition SCGP has gained at the international level.

SCGP is confident in the growth potential of the consumer market, joins hands with partners in Vietnam, with plans to invest over 10 billion baht for business expansion and development of integrated packaging solutions as a response to customer demands in various Vietnamese industries.

Mr. Wichan Jitpukdee, Chief Executive Officer, SCG Packaging Public Company Limited, SCGP, reveals that the company has laid down policies aiming at being the leading provider of integrated packaging in ASEAN. With its experience and expertise, SCGP has joined hands with business operators in various countries to expand businesses, develop packaging solutions, develop human resources, and add value to products in response to the growing consumer markets. During the past decade, SCGP has continuously increased investment in Vietnam, which has yielded a revenue growth of more than 10% annually. In 2009 the company established Vina Kraft Paper Co., Ltd.in Binh Duong for manufacturing the packaging paper achieving the total production capacity of 500,000 tons per year to support the increasing demand of corrugated packaging and growing industries in Vietnam.In 2015 the company has invested in Tin Thanh Packing Joint Stock Company (BATICO), one of five largest flexible packaging producers in Vietnam. The partnership has resulted in successful development of products and expansion of domestic as well as export markets, leading to additional investment to increase production capacity of 17% or 84million square meters per year to satisfy ever increasing demands for packaging for consumer goods.

SCGP has committed more investment in Vietnam that is Bien Hoa Packaging Joint Stock Company (or SOVI), a leading producer of corrugated paper and offset laminated packaging with an annual  total capacity of 100,000 tons, which the company has acquired 94.11%. SOVI’s annual earning is more than 1,600 million dongs (over 2,200 million baht).

Furthermore, on February 9, 2021, SCGP has signed a contract in Duy Tan Plastics Manufacturing Corporation (Duy Tan), Vietnam’s leading producer of rigid plastic packaging with a customer base comprising multinational corporations and domestic consumer goods producers of leading brand names. Duy Tan also manufactures household plastic containers under the brand name “Duy Tan” with a capacity of 116,000 tons per year.It is expected that SCGP’s acquisition of Duy Tan’s 70% stakes will be completed in the first half of 2021.

The company’s increased investment in Vietnam is in line with its strategic plan, which foresees an increase in the diversity of products, including plastic and paper packaging, as well as the development of domestic design teams. The plan aims at enhancing the company’s ability to provide integrated packaging solutions to satisfy customers’ specific needs. At the same time, SCGP is fully prepared to work cooperatively with all partners, to share experience and knowledge in the development of integrated packaging solutions as well as to manage existing resources in the most effective manner and increase production efficiency to support the growing demand for diverse types of packaging of customers in ASEAN.

“All three projects to expand our production base for downstream products in Vietnam are expected to contribute to SCGP’s increased sales of about 8,500 million baht per year. Moreover, we are looking into expanding our paper production capacity in northern Vietnam. This is to satisfy domestic demands and expansion of export markets, which will be a boon to Vietnam’s economic growth as well.”, The SCGP CEO says.

SCGP grows from strength to strength during 2020 amidst the enomomic challenges as the result of the pandemic. Sales revenues reached 92,786 million baht, an increase of 4% compared to 2019, and a net profit of 6,457 million baht, an increase of 23%compared to 2019, all resulting from the business model offering diverse packaging solutions fulfilling increasing customer needs as well as effective management of supply chains and addition of downstream packaging portfolios. The year 2021 will see continuous investment plans in ASEAN, especially on downstream packaging businesses as well as development of innovative products and business operations based on the ESG framework.

Mr. Wichan Jitpukdee, Chief Executive Officer, SCG Packaging Public Company Limited, SCGP, reveals that while the global economy was facing an upheaval as the result of the COVID-19 pandemic, the company was able to maintain steady growth during 2020. It achieved sales revenues of 92,786 million baht, an increase of 4% compared to 2019, a net profit of 6,457 million baht, an increase of 23% over last year’s, and EBITDA (Earnings before interest, tax, depreciation and amortization excluded dividend from associates  and included FX gain/loss from loans from Q1/2019 onward) of 16,876 million baht, an increase of 11%.

                SCGP’s impressive growth resulted from its ability to offer a wide diversity of packaging solutions, and effective management of costs, raw materials and supply chains, allowing for production most suitable to the situation. An expansion of its downstream packaging business and its merger and partnership strategy to expand its base in ASEAN as well as its close cooperation and synergy with PT Fajar Surya Wisesa Tbk. and Visy Packaging (Thailand) Limited have helped SCGP to achieve its growth.

The company’s performance in the fourth quarter of 2020 was similarly impressive compared to that of last year. Its sales revenues amounted to 23,596 million baht, increasing 2% over the same period of the previous year, resulting in net profit of 1,486 million baht, increasing 24% over the same period of the previous year, and EBITDA of 4,211 million baht, increasing 9% over the same period of the previous year.

The company’s revenue growth resulted from increased packaging demand in the food and beverages, consumer goods and foodservice sectors, especially during the end-of-year festive season. Economic stimulus measures in Indonesia also contributed to the growth.

The situation in several countries has improved. Countries’ economic stimulus measures, increasing demand for packaging for consumer goods and food and beverages, food safety packaging, and e-commerce growth all contributed to SCGP’s increased sales during the last quarter of the past year.

During the fourth quarter of last year, SCGP has invested in Bien Hoa Packaging Joint Stock Company (SOVI) in Vietnam to expand its downstream packaging business and strengthen its upstream packaging operations in the country. SCGP’s latest investment in Go-Pak UK Limited (Go-Pak), a leading foodservice packaging producer, will enable the company to expand its market to the UK, Europe and North America with a wider variety of packaging products.

The investment in SOVI and Go-Pak is expected to increase revenues by 5,000 million baht a year and boost the company’s ability to provide completely integrated packaging solutions.

The SCGP CEO adds that the company has earmarked a capital expenditure plan of approximately 20,000 million baht for the year 2021, targeting downstream packaging in ASEAN. Meanwhile, the company’s projects to boost its production capacity of paper packaging in Indonesia and the Philippines and of polymer packaging in Thailand will be completed and ready for operation within the current year.

In consideration of the FY2020 financial performance, the Board of Directors has proposed for shareholder approval at the Annual General Meeting (AGM), a full year 2020 annual dividend payment of 0.45 Baht per share, with a payment date of 22 April 2021, record date of 8 April 2021, and XD-date of 7 April 2021. 

Mr. Wichan explains that SCGP has laid down effective management plans to enlarge its customer base in the consumer goods industry in order to cope with anticipated expansion of the packaging industry in the region as the pandemic situation improves and the economy begins to recover. He expects that the demand for packaging for food products, consumer goods, and personal care and hygenic products will continue its upward trend this year. In the longer term, the packaging industry is expected to benefit from increasing relocation of production bases to ASEAN.

The SCGP CEO concludes that SCGP is firmly committed to operating its businesses within the environmental, social and corporate governance (ESG) framework.

The company attaches great importance to its social and environmental responsibilities. It will make effective use of resources by increasing the proportion of renewable energy as well as developing innovative packaging products that help conserve the environment and improve consumers’ quality of life. The example is R-1, innovative flexible packaging that comprises multiple layers to offer unique of high-impact resistance, content protection, and recyclability , which SCGP in cooperation with Dow Thailand Group and Khao Tra Chat have developed R-1 to environment-friendly rice bags that is 100% recyclable and is in accordance with the Circular Economy principle by reusing resources to its utmost utility.