Thai SCG eyes 70% share of ‘green’ products to total sales by 2030

SINGAPORE (ICIS)–Thai conglomerate Siam Cement Group (SCG) is targeting sales of environmentally friendly products to account for two-thirds of total sales in 2030, as it looks to beef up its “green” polymer capacity to 400,000 tonnes/year by 2025.

Products and services categorized under ”SCG Green Choice” had a 40% share to SCG’s total revenues of Thai baht (Bt) 387.4bn ($12bn) in the first nine months of 2021.

“With global brand owners’ strong commitment to circular economy, recycled resin demand is likely to grow at double the pace of conventional resin,” SCG had said in a slide presentation to investors on 12 October.

The group expects 100% of plastic packaging to be recyclable by 2025.

SCG’s Circular Economy Roadmap

Source: SCG, 12 October 2021

The group and Brazilian producer Braskem are currently studying the feasibility of building a bio-ethanol dehydration plant in Thailand to produce bio-ethylene and bio-polyethylene (bio-PE).

The PE capacity could be 200,000 tonnes/year .

Meanwhile, SCG in late April  agreed to acquire a 70% stake in Portugal-based plastic recycling firm Sirplaste, which has a 36,000 tonne/year capacity and sells to customers in Europe. The deal is expected to be completed by the end of the year.

“The largest mechanical recycling company in Portugal would further develop recycling technology for high-quality (post-consumer recycled resin [PCR]) and expand the distribution to Europe to meet the rising demand for PCR,” the conglomerate said.

In pursuit of advanced chemical recycling in Thailand, a demonstration plant that producing about 4,000 tonnes/year of recycled feedstock was built at the company’s complex in Rayong province, with scope for capacity expansion.

The plastic recycling business using chemical recycling process is operated by SCG’s 60%-owned subsidiary Circular Plas Co Ltd.

The process of using advanced recycling technology was the first in Thailand to receive the International Sustainability and Carbon Certification or ISCC PLUS, SCG said in late September.

SUSTAINABILITY GOALS
The Thai conglomerate is working toward net zero emissions by 2050 and is targeting to cut its greenhouse gas (GHG) emissions in 2030 by 20% from 2020 levels.

“The ongoing capacity and business expansion such as the completion of the Longson Petrochemicals project (LSP) in Vietnam in 2023 and business acquisitions (Merger & Partnership) will increase SCG’s total GHG emissions over the next few years,” it said.

LSP is Vietnam’s first petrochemical complex. Construction was 83% complete as of the first half of 2021, with commercial operations slated in the first half of 2023.

In Indonesia, SCG affiliate Chandra Asri expects to start up its second petrochemical complex in Cilegon in 2026.

“Nevertheless, we will strive to drive our net GHG emissions down to 27.1 million, or by 20% when compared to the absolute level in 2020, within 2030,” SCG said, noting that the group’s emissions last year stood at 33.9m tonnes of carbon dioxide (CO2).

In the third quarter, SCG’s net profit shrank 30% year on year, dragged down by losses at its cement-building material segment, and weaker chemical earnings, which offset strong profitability in packaging operations.

SCG revenue by business segment

in million Thai baht (Bt)	Q3 2021	Yr-on-yr % change	Nine-month 2021	Yr-on-yr % change
Sales	131,825	31.0	387,446	28
Cement-building material revenue	44,059	3	136,660	4
Chemicals revenue	60,060	59.0	172,407	56
Packaging revenue	31,930	37.0	89,078	29

SCG profit by business segment

in million Thai baht (Bt)	Q3 2021	Yr-on-yr % change	Nine-month 2021	Yr-on-yr % change
Net profit	6,817	-30.0	38,867	49
Cement-building material profit	-2,400	N/A	2,877	-57
Chemicals profit	5,210	-5.0	24,431	107
Packaging profit	1,781	33	6,179	24

LOGISTICS BUSINESS EXPANSION
SCG announced on 27 October that it is expanding its logistics business in southeast Asia.

Its subsidiary SCG Logistics Management Co Ltd (SCGL) has set up new company in the Philippines which will provide international forwarding logistics, fleet management and warehouse management services, with an investment of Bt7.8m.

SCGL currently operates logistic business in Thailand, Vietnam, Indonesia, Cambodia, Myanmar, and southern China, with connections to Malaysia and Singapore.

“By expanding to Philippines, the company will be able to provide a more comprehensive service network,” it said.

($1 = Bt33.21)

Focus article by Pearl Bantillo