Village Connect
SCG, a major Southeast Asian conglomerate, demonstrated remarkable financial stability in 2024, achieving an EBITDA of 87,917 million PHP (US$1,528 million), maintaining its performance from the previous year. Despite navigating a challenging economic environment characterized by a downturn in the petrochemical cycle, geopolitical uncertainties, fluctuating energy costs, and high interest rates, SCG successfully preserved its financial health and delivered steady returns to shareholders.
Strategic Measures Fuel Stability
Thammasak Sethaudom, President and CEO of SCG, credited the company’s resilience to strategic reinforcement measures initiated in late 2024. These measures focused on optimizing working capital, restructuring operations, and exercising stringent control over capital expenditure. As a result, SCG effectively reduced its working capital by 10,613 million PHP (US$183 million) year-on-year and exited unprofitable ventures, prioritizing high-yield, rapid-payback projects.
These strategic moves led to a significant decrease in net debt by 28,718 million PHP (US$494 million) from the previous quarter, bringing the net debt-to-equity ratio to a healthy 0.7 times. SCG closed the year with robust cash reserves of 91,289 million PHP (US$1,570 million), positioning the company for future investments and growth opportunities.
Poised for Growth in ASEAN
With an optimistic outlook for 2025, SCG is strategically positioned to capitalize on economic recovery in ASEAN markets, especially in Indonesia and Vietnam, where GDP growth is projected to outpace the global average. This growth is anticipated to be driven by robust domestic demand, government stimulus measures, and increased foreign investment.
SCG’s construction materials segment is set to benefit significantly from this positive trend. SCG Distribution & Retail is actively expanding its Mitra 10 modern trade format in Indonesia, aiming for 100 branches by 2030. In 2024, it operated 56 branches, catering to over one million customers monthly. Additionally, SCG Packaging (SCGP) is poised to leverage rising consumption trends and growing demand for packaging solutions across the region.
Navigating Challenges in the Chemicals Sector
While SCG demonstrated robust overall performance, its chemicals business (SCGC) faced challenges in 2024 due to intensified competition and reduced demand, particularly from China. To counter these pressures, SCGC focused on High-Value Added Products & Services (HVA), cost efficiency, and disciplined working capital management.
With signs of stabilization in the petrochemical cycle and anticipated lower oil prices in 2025, SCGC aims to enhance EBITDA and further improve cost management. A key strategic initiative includes accelerating the Long Son Petrochemicals (LSP) project in Vietnam, leveraging ethane gas feedstock through a long-term supply agreement and chartering ethane shipping vessels to secure long-term competitiveness.
Expanding Exports and Investing in Innovation
SCG is also pursuing growth in new export markets, including North America and Australia. SCG Cement & Green Solutions is scaling up exports of Low Carbon Cement, targeting approximately one million tons in 2025. SCG Decor is expanding its high-strength X-PORCELAIN tile exports, aiming to double its growth, while SCGP is broadening its reach in polymer packaging and printing paper exports.
In addition, SCG continues to invest in smart living solutions and renewable energy. SCG Smart Living is diversifying its product offerings with air quality solutions and solar technology under the ONNEX brand. Meanwhile, SCG Cleanergy is expanding its solar power capacity, targeting 3,500 MW by 2030, reflecting the company’s commitment to sustainable growth.
2024 Financial Performance and Regional Expansion
SCG reported total Revenue from Sales of 833,070 million PHP (US$14,483 million) in 2024, a 2% increase from the previous year, primarily driven by higher sales volumes in SCGC and SCGP. However, net profit declined by 76% to 10,336 million PHP (US$180 million) due to LSP project performance and lower contributions from associated companies.
In ASEAN, excluding Thailand, SCG’s operations contributed 223,378 million PHP (US$3,883 million) in Revenue from Sales, a 12% year-on-year increase, accounting for 27% of the company’s total revenue. In the Philippines, Revenue from Sales surged by 45% to 19,356 million PHP (US$337 million), largely driven by SCGP’s performance.
Commitment to Sustainability and Innovation
SCG remains dedicated to sustainable development and innovation. In the Philippines, the company introduced the lightweight Q-con block, an eco-friendly building material, in partnership with local contractors, reinforcing its focus on Inclusive Green Growth. At NATCON-CONEX 2024, SCG showcased sustainable building solutions, including Smart Block, Smart Putty, and Façade products.
Additionally, SCG Philippines expanded its retail presence by opening four new CTM stores, offering affordable ceramic tiles and sanitary ware. The company also collaborated with Urban Farmers PH to promote urban farming initiatives, reflecting its commitment to ESG principles.
Outlook for 2025
Looking ahead, SCG is optimistic about sustaining strong EBITDA management and expanding its market presence in ASEAN. “SCG continues to adapt and expand into new markets. We are confident that in 2025, we will sustain strong EBITDA management while ensuring continuous commitment to shareholder care,” Thammasak concluded.
With strategic growth initiatives, an unwavering focus on sustainability, and a solid financial foundation, SCG is well-prepared to navigate future challenges and capitalize on emerging opportunities in the dynamic ASEAN market.
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