SCG, a leading conglomerate in Southeast Asia, demonstrated resilience in 2024, effectively managing its EBITDA at 87,917 million PHP (US$1,528 million), matching its 2023 performance. As Thammasak Sethaudom, President and CEO of SCG, highlighted, this achievement came amid a complex economic landscape marked by a slowdown in the petrochemical cycle, geopolitical tensions, volatile energy costs, and high interest rates. Despite these headwinds, SCG maintained financial stability and delivered consistent shareholder returns.
A key factor in SCG’s success was its proactive implementation of reinforcement measures initiated in late 2024. These measures focused on three core areas: working capital management, operational restructuring, and controlled capital expenditure. These efforts yielded significant results, including a reduction in working capital of approximately 10,613 million PHP (US$183 million) year-on-year, streamlining operations through discontinuing unprofitable ventures, and focusing on high-return, rapid-payback projects. Consequently, net debt decreased by 28,718 million PHP (US$494 million) from the previous quarter, resulting in a healthy net debt-to-equity ratio of 0.7 times. SCG ended the year with robust cash reserves of 91,289 million PHP (US$1,570 million).
Looking ahead, SCG is well-positioned to capitalize on the projected economic recovery in ASEAN. The region, particularly Indonesia and Vietnam, is expected to experience GDP growth exceeding the global average, fueled by strong domestic demand, government stimulus, and increasing foreign investment. This positive outlook bodes well for SCG’s construction materials businesses. SCG Distribution & Retail, for instance, is accelerating the expansion of its Mitra 10 modern trade format in Indonesia. It aims to reach 100 branches by 2030, having already achieved 56 branches serving over one million customers monthly in 2024. SCGP (SCG Packaging) is also poised to benefit from rising ASEAN consumption and the increasing demand for packaging paper.
While SCG’s overall performance remained strong, its chemicals business (SCGC) faced challenges in 2024. The regional petrochemical industry experienced intensified competition due to new production capacity and weakened demand stemming from China’s economic slowdown. SCGC responded by prioritizing the development of High-Value Added Products & Services (HVA) and diligently managing EBITDA, costs, and working capital to maintain competitiveness. With signs of stabilization in the petrochemical cycle and anticipated declines in oil prices in 2025, SCGC is focused on further enhancing EBITDA and cost management efficiency. Notably, SCGC has accelerated its Long Son Petrochemicals (LSP) project in Vietnam by increasing the use of ethane gas feedstock, securing a long-term supply agreement, and chartering ethane shipping vessels to enhance long-term competitiveness.
SCG is also actively pursuing growth in new export markets, including North America and Australia. SCG Cement & Green Solutions is ramping up exports of Low Carbon Cement, targeting approximately one million tons this year. SCG Decor is experiencing success with its high-strength X-PORCELAIN tiles exports and aims to double export growth in 2024. SCGP is similarly expanding exports of polymer packaging, food service packaging, and printing and writing paper.
Furthermore, SCG is investing in smart living solutions and clean energy. SCG Smart Living is broadening its portfolio to include air quality products and solar solutions under the ONNEX brand while introducing more affordable product lines. SCG Cleanergy is expanding its solar power generation and distribution capacity, aiming for 3,500 MW by 2030.
In 2024, SCG reported Revenue from Sales of 833,070 million PHP (US$14,483 million), a 2% increase year-on-year, driven by higher sales volumes from SCGC and SCGP. However, profit for the year declined by 76% to 10,336 million PHP (US$180 million) due to the performance of the LSP project and lower contributions from associate companies. Excluding extraordinary items from 2023, profit declined by 52%. Fourth-quarter 2024 Revenue from Sales increased by 2% from the previous quarter, but the company reported a loss of 834 million PHP (US$15 million) due primarily to LSP performance and entire depreciation expenses.
SCG’s ASEAN operations (excluding Thailand) generated Revenue from Sales of 223,378 million PHP (US$3,883 million) in 2024, a 12% increase year over year and contributing 27% to SCG’s total revenue. In the Philippines, Revenue from Sales reached 19,356 million PHP (US$337 million), a significant 45% increase driven by SCGP.
Meanwhile, SCG Philippines is committed to sustainable development. This quarter, the company introduced the lightweight Q-con block, an eco-friendly building material from Thailand, to the Philippine market, a collaboration with key contractors like EEI that underscores its focus on Inclusive Green Growth. SCG showcased a diverse range of sustainable building solutions at NATCON-CONEX 2024, including Smart Block, Smart Putty, and Façade, reflecting its dedication to providing high-quality, environmentally friendly products.
Meanwhile, SCG Philippines expanded its retail presence with the opening of four new CTM stores, offering affordable ceramic tiles and sanitary ware. Furthermore, the SCG Open House 2024 provided a platform for industry professionals to explore its latest innovations and foster collaboration within the construction and home improvement sectors.
The company also partnered with Urban Farmers PH on urban farming initiatives, demonstrating its commitment to ESG principles and Inclusive Green Growth.
“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.
