vision: asean sustainable business - listed...

2013 / 2012 / 2011: Industry Leader (Construction Materials)

Vision: ASEAN Sustainable Business Leader

Strategies:ASEAN Expansion

High Value Added products & services (HVA)

Member of DJSI

“CEO Day”

by

Sep 10, 2014

Agenda

Key Points & Strategies Business Updates Sustainability & People Financials Appendix

Latest updates

Cement – Building Materials: Siam Global Int’l: 50% stake in regional construction-related retail with Siam Global House (190 MB) Mortar: 2 MT capacity expansion (Lampang and Khon Kaen (2,800 MB) – H1/16 start Woodchip Cement Board: acquired a 55% stake in Panel World, with cap of 2.4 Mill sqm. (550 MB) Cement plants: (Laos, Myanmar, Indo, Cambodia) 6.3 MT (39,000 MB - $1,300 M) – Q2/15 - Q2/17 starts. Ceramic (Italy): 33% stake, 5 Mill sqm. (506 MB) - H1/15 start Ceramic Tiles (Vietnam): 85% stake M&A, 75 Mill sqm. (7,200 MB or $240 M). Precast concrete: two precast plants totaling 2.4 Mill sqm (2,500 MB or $80 M) – Q1/15 start Sanitary ware and fitting assets: for majority stake (2,600 MB or $90 M). MG Stone Slabs: 400,000 sqm. green-field (1,500 MB or $50 M) – Q2/15 start.

Chemicals: Increase stake in BST: from 26% to 49% (8,028 MB or $260 M). Debottleneck of Chandra Asri (Indonesia): Ethylene capacity gained up 43% - H2/15 start LDPE coating grade (HVA) of 60,000 tons, totaling 152,000 tons per year, by mid-2016 in Thailand.

Paper:Fibrous chain: Glassine paper (HVA): 1,825 MB , 60,000 tons – Q2/16 start Nippon paper’s 30% stake in SCG Paper’s Fibrous chain.Packaging chain: Flexible Packaging (HVA): acquisition of a 22% in Prepack of 14,000 tons (340MB) Box plant - Indonesia: 90% stake M&A, 37,000 tons (395 MB or $13 M).

- Thailand: 75% stake M&A, 121,000 tons (888 MB or $30 M) Packaging paper in Thailand: 400,000 tons brown-field (6,700 MB or $220 M).- Q4/14 start

ASEAN portfolio H1/14

Cement and Building Materials: New cement plants in ASEAN. Acquire building materials assets.

Chemicals: Flexible feedstock cracker (Vietnam chemicals complex). Debottleneck of Chandra Asri (Indonesia cracker).

Paper: Gear towards packaging solution. Improve productivity in the fibrous chain.

Expansion into ASEAN

Majority of the CAPEX & Investment

R&D and Product DesignTeamBudgeted R&D spending of 4,000 MB for FY2014.

R&D Product and Design Team(staffs / Jul/14)

364 (Ph.D. 9) 1,349 (Ph.D. 81)2007 Jul/14

R&D Spending

HVA Strategy(High value added products and services)

HVA’s Revenue from Sales

HVA attributes: 5-10% higher margin Performance Solutions provider

Service & Design Branding

HVA Strategy Examples

Cement-Building Materials

“ Color rendered mortar”

“Roofing solution”

“Large format ceramics”

Chemicals

“ Medical grade plastic”

“Wire & Cable”“ Automotive Cluster”

“ EU-certified PE water pipe”

“Roto molding”


Packaging & Paper

“ Lightweight packaging solution”

“Less paper-Same strength”“Up to 25% lighter”

“Glassine paper”“Flexible Packaging”


Agenda


Revenue from sales

Drivers:Chemicals = Global Paper = RegionalCement = Local

FY2013434,251 MB (+7% y-o-y)

H1/14246,560 MB (+14% y-o-y)

H1/13215,980 MB

Net profit segments

FY201336,719 (+56% y-o-y)

Other = Mainly SCG Investment and Corporate

H1/1318,720 MB

H1/1416,913 MB (-10% y-o-y)

ASEAN cement markets in 2013

58

3 16

56

67

80

0

20

40

60

80

Laos Cambodia Myanmar Thailand Indonesia Vietnam

MT- Domestic demand- Domestic capacity

48-50Export

39-40

46

Export

51

5Import

Import

Import 3

60

1.82.2Import 3

1

Ex Factory price ($/Ton): $60-65 $70 $75 $61 $75 $55-60 (HCM)Demand Growth (%): 5-10% 11% 22% 7% 5.5% +4%Consumption per capita: 400 200 70 600 225 450 (kg./head)

Cement plants are strategically located.Domestic market share of approx 40%.

EXISTING:EXISTING:North:SCG 2 MT

Central:SCG 14 MTOthers 33 MT

South:SCG 7 MT

New Plants:

Thailand 23 MTCambodia 1 MTVietnam 0.2 MT

StartCambodia 0.9 MT Q2/15Indonesia 1.8 MT Q3/15Myanmar 1.8 MT Q2/16Laos 1.8 MT Q2/17

6.3 MT

Cement Balance: Thailand & Neighboring countries

Myanmar 2013 2018Supply 6 8

Demand 5 12

Myanmar 2013 2018Supply 6 8

Demand 5 12 Laos 2013 2018Supply 3 5

Demand 3 4

Laos 2013 2018Supply 3 5

Demand 3 4

Cambodia 2013 2018Supply 1 3

Demand 3 5

Cambodia 2013 2018Supply 1 3

Demand 3 5

Thailand 2013 2018Supply 56 60

Demand 40 50

Thailand 2013 2018Supply 56 60

Demand 40 50

2013 2018 GrowthCapacity 66 76 3%Demand 52 71 7%

Demand to Capacity 79% 93%

MT

Domestic cement industry

Thai cement market – all players

+85-90% utilization

Capacity 56MT

Domestic

Export

Total Domestic Growth Rate (% y-o-y)

0

10

20

30

40

50

60

1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014e

- 10% -45% 15% -8% -1% 23% 6% 11% 9% -2% -6% -6% 1% 10% 3% 12% 7% 0%

Residential+50%

Factory +Retail +

Commercial

Gov’t

VolumeSegments

Domestic cement segments

% growth y-o-yFY2013 Q1/14 Q2/14 Q3/14e

FY2013:

80% Provincial

20% BKK vicinity

20%

3%

6%

14%

1%

1%

9%

-1%

1%

Total 7% 4% 0% -3%

Source: Ministry of transport

High speed train40%

Dual-track Railway

20%Road Maintenance

9%Motorway

5%Others2%

BangkokMass Transit

Trains24%

Previous Bill2 trillion baht ($65 billion)

Infrastructure PlanTo proceed, based on annual budgets, and prioritization.

Source: Office of Transport and Traffic Policy and Planning

Current Plan2.4 trillion baht ($78 billion)

Annual Budget Basis

Infrastructure Projects of Interest:Office of Transport and Traffic Policy and Planning

Tier 1: on-going

Rail - 6 MRT lines (Bkk)

- Light Red - Dark Red- Blue- Purple- Dark Green- Dark Green extension

- Track bed overhaul

Road - Maintenance and repair of

235 highways, nationwide.

River & Sea - 12 levees (Pa Sak River)

Tier 2: EIA approved

Rail - 3 MRT lines (Bkk)

- Orange, Pink, Yellow- 4 MRT extensions (Bkk)- Airport Link extension- Crossing barriers upgrades - Locomotive hub (Kaeng

Khoi)

Road - 10 AEC highways - 3 AEC supportive roads- 2 Motorways- Flyovers (83 locations) - 4 lane road extensions- D/C in Chiang Rai

Tier 3: waiting for EIA

Rail - 14 Dual track lines- 6 MRT extensions (Bkk)- High-speed rail

Road- Motorway- Chao Praya River bridge- Expressway extensions- Mae Sod by-pass- 15 warehouses and hubs

River & Sea - Deepsea Port (Satun)- Ports (Chumphon, Songkhla)- Pa Sak River transport

model.

Domestic cement pricePrices in Q2/14 were flat in the 1,950 – 2,000 Bt/ton range ($62/ton).

Average Domestic Price of Grey Cement (Net ex-factory)

4.76.0 7.1 7.6

6.2 6.1 6.8 7.0 8.1 8.2 7.6 7.3 6.4 5.74.0

1.3 1.2

22 24 22 2124

27

34 35 34

40 3841

45

5257 58 59

0.0

10.0

20.0

30.0

40.0

50.0

60.0

70.0

0.0

5.0

10.0

15.0

20.0

25.0

30.0

35.0

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Q1/14 Q2/14

Chart Title

SCG’s Cement exportsExport prices are FOB.

$/ton

Export Volume (MT)

Export Prices (FOB)

Bagged cement % : 11% 17% 31% 30% 42% 61% 69% 66%

MT

Housing Products Ceramics Tiles (floor & wall)

1. Roofing Tiles

2. Fiber Cement Products (ceiling and wall)

Types of tiles• Fiber Cement roof tiles• Concrete roof tiles• Ceramic roof tiles

Formats:mosaics to slabs (1.5 x 3.4 meter)

Others products

CeramicLargest global capacity (225 Mill sqm).

Competitiveness: Global branding Digital printing Dry grinding process Gasification system

SCG’s Capacity 225 Mill sqm.Thailand 106

Vietnam 75

Indonesia 32

Philippines 12

ASEAN production rationalization.

33 35 33 32 35

50 51 50 49 53

0

40

80

120

160

0

10

20

30

40

50

60

70

80

90

100

Q1/12 Q2/12 Q3/12 Q4/12 Q1/13 Q2/13 Q3/13 Q4/13 Q1/14 Q2/14

Baht/sqm.M sqm.Average Price

Sales volume

Sales volume & prices for all ASEAN subsidiaries

Ceramic Tiles Volume grew 5% y-o-y as a result of improvement in Vietnam operation.

Consolidation of Prime(Vietnam)

SCG Cement-Building Materials

Distribution Wholesale Retail Logistics

“ASEAN Market Facing Platform”

Structure Products Cement efficiency RMC integration Precast concrete Lightweight concrete block Mortar

Housing Products + Ceramics No.1 ceramic tile capacity Roofing materials Fiber-cement products Home solutions

SCG Cement-Building MaterialsSales breakdown in H1/14.

Notes: Ceramics includes Sanitary Ware & Fittings

H1/14 Sales: 93,890 MB

SCG ChemicalsIntegrated and competitive operations

+55% of PE/PP are exported to +110 countries

Thailand VietnamCrackers

ROC(1999)

1.2 MT C2 + C3

MOC(2010)

1.7MT C2 + C3

Downstream

Subsidiaries Associates

PEPP

PVCOthers

Dow Mitsui

Chemicals Mitsubishi

Rayon JSR

Indonesia Cracker (30%)

CAP(1995)

0.9 MT C2 + C3

Debot(Late-2015)

1.3 MT C2 + C3

CrackerLong Son Petrochemical

(LSP) - $4.5 Billion

1.4 MT C2 + C3

Status update:• SCG 46%,

Vietnamese Partners 29%, Qatar Petroleum Int’l 25%

Completed:• Long-term feedstock • Land lease 400 hectare• Financial advisor• Bidding for EPC• Securing financing

Downstream

Subsidiaries Associates

PEPPSMBD

Michelin SSBR (Start up 2017)

Typical crackersGas-based Naphtha-based

0

300

600

900

1200

'000 tons

‘000 tons

Types of crackers

0

300

600

900

1200

'000 tons

ethylenepropylene

‘000 tons

SCG’s 1st

cracker(1999)1.2 MT

Propylene-rich crackerNaphtha-based

SCG’s 2nd

cracker(2010)1.7 MT

0

300

600

900

1200

'000 tons

‘000 tons

by-products

ethylene

propyleneby-products

ethylene

Historical margin: HDPE – Naphtha

0

100

200

300

400

500

600

700

800

900

1,000

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Price Gap$/ton

Trough $300/ton

Trough$400/ton

Asian crisisUS crisis

EU crisis

0123456789

10

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Price Gap%

3%

8%

5%

1%

4%3% 3%

2%

Global ethylene incremental supply growth

Incremental supply growth (MT):

2.8 4.4 4.6 4.7 4.7 3.5 10.5 6.9 2.0 5.0 4-5 4-5 3-4 7-10

“Flood of supply”

4% 4% 4% 4%3% 3%

Global ethylene capacity (2018): naphtha and conventional gas accounts for 91% of the capacity.

Ethylene global capacity (2018)

10 shale gas crackers = 4% of the world’s capacity. Shale crackers face delays (EIA approvals). CTO are near Mongolia (coal reserves). CTO water requirement (5 times greater). CTO has water scarcity (location, and winter period). CTO has high investment cost

$3-4 billion investment:CTO = 0.6MT olefins capacity Conventional = 1.5MT olefins capacity

Incremental ethylene by region(2014 – 2018)

16%25%

32%27%

North America

Middle East

North Asia*

South East Asia

Europe

7%

31%15%

14%

32%

Global propylene capacity (2018): naphtha and refinery accounts for 83% of the capacity.

Propylene global capacity(2018)

Liquid based (naphtha & refinery) are 83% of the world’s capacity, and are global price setters.

PDH (shale + LPG) amount to 12MT or 11% of the world’s capacity.

Incremental propylene by region(2014 – 2018)

16%30%

7%47%

North America

Middle East

North Asia*

SouthEast Asia

22%

8%

58%

12%

HDPE – Naphtha Price Gaps

Note: Prices refer to SEA regional prices

PP – Naphtha Price Gaps


PVC

Prices refer to FE regional prices

Benzene & Toluene


Price Gaps of Associates

Note: BD and MMA prices refer to SEA regional prices , PTA prices refer to Asian regional prices

InternalCorrugated Box

ExternalContainerboard

Paperboard

SCG Paper: product portfolio

Internal Eucalyptus Pulp

P&W Paper

Dissolving Grade Pulp

Fibrous chain 23%

H1/14 EBITDA(5,358 MB)

Packaging chain 77%

12% EBITDA Margin

18% EBITDA Margin

2.3 MT

470 KT

570 KT

1.0 MT

96 KT

Packaging Chain - Rengo’s 30% stake in all corrugated box businesses and Vietnam’s packaging paper operations.

Fibrous Chain - Nippon Paper’s stake of 30%

SCG Paper: historical performance

SCG Paper: growth strategies

Regional / Geographical Growth (Targets: Vietnam and Indonesia)

Growing thru HVA Products / Services (such as High Performance Paper and Packaging)

Packaging Chain“Growing Packaging Business in ASEAN”

Primary Packaging

• Product protection• Marketing tools• Flexible packaging,

rigid, glass, or metal

Primary Packaging

• Product protection• Marketing tools• Flexible packaging,

rigid, glass, or metal

Secondary Packaging

• Marketing tools• Information• Mainly paper-based

packaging; folding carton

Secondary Packaging

• Marketing tools• Information• Mainly paper-based

packaging; folding carton

Tertiary Packaging

• Logistics / transportation

• Handling / inventory management

• Corrugated container

Tertiary Packaging

• Logistics / transportation

• Handling / inventory management

• Corrugated container

Other Packaging

• Logistic support • Retail packaging

Other Packaging

• Logistic support • Retail packaging

SCG Paper: growth strategies

Fibrous Chain“Business Transformation”

WoodWood

PulpPulp

P&W PaperP&W Paper

High Growth Fibrous

Materials

High Growth Fibrous

Materials

Non-P&W PaperNon-P&W Paper

Dissolving Grade PulpApplication:

Rayon Fiber (textile)

JV with Nippon Paper IndustriesJV with Nippon Paper Industries

Regional Prices: Packaging Paper

Note: regional prices

Note: regional prices

Regional Prices: Fibrous (Printing & Writing Paper)

SCG InvestmentContribution in FY2013 was 3,327 MB in equity income, and another 4,469 MB from dividend income.

SCG InvestmentManaged by the CFO

Siam Kubota Leasing

Siam Kubota Metal Tech Michelin Siam Group (10%)

Siam Toyota Manufacturing (4%)

Automotive business

Toyota Motor Thailand (10%)

Siam Yamato Steel (10%)

OthersAgricultural business

Siam Kubota Corp (40%)

Musashi Auto Parts (21%)

Siam Lemmerz (30%)

Aisin Takaoka Group (30%)

Agenda


Cross-cultural diversity& to prepare and encourage

Thai staffs to go overseas

Local Staff Engagement

Local Community Concerns

ASEAN challenges

Acquisition of assets is just the first step...

Systematic training roadmap

.

*

*

*

*

*

* = international programs

External training programs

Program Current Since Classes Staff

AMP – Advanced Management Program HarvardWharton

19822007

327

8114

EDP – Executive Development Program IMDColumbia

20142007

14

45177

MDP – Management Development Program WhartonDuke

19802011

304

1,418225

Marketing Excellence ProgramKellogg 2006 8 543**

Corporate scholarship program Total 489 scholarships granted since 1973

295 graduates are working with the companyCurrent 75 students (72 overseas): MBA 17, Engineering 42, Specialist 16

MBA Engineering and Specialist As of Aug-14

ranked by

: ranked “Gold Class” which is top group for each sector.

: initial year of DJSI membership.

2013-2008

2013 / 2012 / 2011 : Industry Leader (Construction Materials)

2004

DJSI was established in 1999 as the first global index to monitor sustainability of listed companies.

+60 global funds in 16 countries follow the DJSI. For further details: www.sustainability-index.com

DJSI: Dow Jones Sustainability Indices

Member of DJSI

DJSI sector overview Construction Materials

Source: http://www.sustainability-indices.com

Encouraging “Open & Challenge”

Live 4 Core Values• Adherence to Fairness• Dedication to Excellence• Believe in the Value of the Individual• Concern for Social Responsibility

Open:• Open-minded & Deep Listening

• Eager to learn

• Networking & Collaboration

• Learning from mistakes

Challenge:• Challenge status quo

• Think-out-of the box

• Assertive

• Risk taking

• Willing to take initiatives

+

Agenda


Note: EBITDA includes dividend received

EBITDA

Profit for the period

Equity Income

Net debtInternal leverage target of 2.5 times (Net debt / EBITDA)

Debt profile:• Net Debt / EBITDA = 2.6x• Net Debt / Equity = 0.9x• 98% are Thai Baht• 93% are fixed • Interest cost of 4.0%• Cash on hand of 33,400 MB

Mainly retail investors. No debt covenant. Thai Baht, mainly 4 years fixed. “A” rating by Fitch. Unsecured, unsubordinated.

40,000

30,000

15,000

25,000

50,00045,000

15,000

6,500

010,00020,00030,00040,00050,00060,000

2012 2013 2014 2015 2016 2017 2018 2019

MB

NOTE: - Debentures amount to 146,500 MB, as of Aug/14.- Maturing debenture of 5 Billion Baht on Oct 14 (3.85% coupon), will be refinanced with a 10 Billion Baht issuance (4 yrs maturity).

Debenture profile

Debenture Maturity Table

10,000

5,000

CAPEX & Investments

- CAPEX includes debottlenecking, expansion projects, and major turnaround.- Investments are acquisitions and purchase of shares.

Range of 40-50 Bill Baht/year

Incremental capacity

-2007 2008 2009 2010 2011 2012 2013 2014 2015 2007 2008 2009 2010 2011 2012 2013 2014 2015

Chemicals Upstream (Cracker) - ('000 tons) Paper - ('000 tons) Ethylene (subsidary) 800 800 800 1,700 1,700 1,700 1,700 1,700 1,700 Printing & Writing Paper 365 570 570 570 570 570 570 570 570

Propylene (subsidary) 400 400 400 1,200 1,200 1,200 1,200 1,200 1,200 Packaging Paper 1,660 1,660 1,880 1,880 1,880 1,880 1,956 2,306 2,306

Chandra Asri (30% stake) Box 550 637 692 741 795 855 1,013 1,013 1,013

Ethylene - - - - 600 600 600 600 860 - - - - - - - 43 43

Propylene - - - - 320 320 320 320 470 Flexible Packaging - - - - - - - 17 17

Chemicals Downstream - ('000 tons) Cement - (MT) HDPE (subsidiary) 520 520 520 920 920 920 920 920 920 Grey Cement (Camb, Indo) 23 24 24 24 24 24 24 24 27 PP (subsidiary) 320 320 320 720 720 720 720 720 720 White Cement (Thai, Viet) 0.2 0.2 0.2 0.2 0.2 0.4 0.4 0.4 0.4

PVC (90% stake in TPC) 858 828 766 886 886 886 886 886 886 Mortar 0.9 1.3 1.3 1.3 2.1 2.1 2.1 3.1 3.1

Chemicals Downstream (JV) - ('000 tons) Building Products - (M sqm) LLDPE (Dow JV) 300 300 300 650 650 650 650 650 650 Ceramic Tiles 95 122 122 122 149 149 225 225 225

Specialty Elastomers (Dow JV) - - - - 220 220 220 220 220 Ceramic Italian JV - - - - - - - - 5 Propylene Oxide (Dow JV) - - - - 390 390 390 390 390 Ceiling & Wall product 34 50 57 57 65 65 92 92 92

- - - - - - - 15 15 Lightweight concrete 3 3 3 15 15 15 15 27 30.6 Modular Home - - - 200 200 200 1,000 1,000 1,000

MMA (Mitsubishi Rayon JV) 85 85 85 175 175 175 175 175 175 (Sekisui Heim JV)

- - 20 20 20 20 20 20 20

HDPE / LLDPE (CAP JV) - - - - 336 336 336 336 336

PP (CAP JV) - - - - 480 480 480 480 480 SM (CAP JV) - - - - 340 340 340 340 340

Cast Sheets (Mitsubishi Rayon JV)

Machine Glazed Paper (Nippon Paper JV)

LLDPE cast sheet film (Mitsui Tohcello JV)

Total CapacityCapacity at year end

Total CapacityCapacity at year end

Annual dividendPayout policy of 40-50%.

Note: Dividend policy established in 2008

Agenda


Company background

Founded in 1913. Listed in 1975 on the SET. Market cap approximately of $16.9 Billion (as of Sep/14) Free float of 70%. Assets of 459.2 Billion Baht ($14.4 Billion)

Key figures (FY2013): Net Sales 434.3 Billion Baht ($13.2 Billion) EBITDA 61.3 Billion Baht ($ 1.9 Billion) Net Profit 36.7 Billion Baht ($ 1.1 Billion) 49,287 staffs.

Chemicals

Paper

Shareholders

CPB 30%LocalRetail / Inst

36%

Local 66%– Institution / Retail 36%– CPB 30%

Foreign 34%– Foreign Board 25%– NVDR 9%

Aug/14

- CPB (Crown Property Bureau ) = Asset management arm of monarchy- 44.7% of Foreign Board are shareholders from UK.

Local 64%

Foreign 34%

Foreign Board 25%

NVDR 9%

Board of Directors

Management Committee

CFO & Investment

SCG Paper

SCG Chemicals

President & CEO

Audit Committee

Internal Audit Office

Corporate Administration

SCG Investment

Governance and Nomination Committee

Remuneration Committee

SCG Cement - Building Materials

Organization chart

Senior managements

Chaovalit Ekabut VP, CFO - SCG

President - SCG Investment

Tanawong AreeratchakulVP - SCG

Aree ChavalitcheewingulVP - Regional Business

Nithi PatarachokeVP – Domestic Market

Cholanat YanaranopSVP - SCG, President - SCG Chemicals

Somchai Wangwattanapanich VP - SCG Chemicals

Pichit MaipoomSVP - SCG,

President - SCG Cement-Building Materials

SCG Chemicals SCG Cement-Building Materials

SCG Investment Corporate Administration

Kan Trakulhoon President & CEOSCG

Roongrote RangsiyopashEVP - SCGPresident - SCG Paper

SCG’s President

100 Years

Start PresentDanish Managements Thai Managements

1. Oscar Schultz(1914- 1925)

2. Erik Thune(1925- 1934)

3. Carsten Friis Jespersen(1935- 1959)

4. Viggo Fred Hemmingsen(1959- 1974)

5. Boonma Wongswan(1974- 1976)

6. Sommai Hoontrakool(1976- 1980)

7. Charas Xuto(1980- 1984)

8. Paron IsrasenaNa Ayudhya (1985- 1992)

9. Chumpol NaLamlieng(1993- 2005)

10. Kan Trakullhoon(2006- Present)

1913 - 1974 1975 - 2014

Operational history

Crisisof

1997Organic growth

Takeover New industries

1913 - 1970’s 1970’s - 1980’s 1980’s - 1990’s

“Historic roots” “Opportunistic” “Partner of choice”

Cement Construction Materials Steel

Ceramics Paper & Packaging

Chemicals Automotive Electrical

1998 - 2003

Restructure

2004 - onwards

ASEAN&

HVA

Cement – Building Materials Chemicals Paper Investment

Today…..

Past

Current M&A & Green fieldMostly ASEAN Cash-flow financed Cash on hand of 33,400 MB

Mostly green field Mostly Thailand Cash-flow financed

CAPEX & investments

- Packaging Paper- Chemicals

Total Assets $1,111 Mil (36,050 MB)Total Assets $21 Mil (697 MB)

Total Assets $228 Mil (7,386 MB)- Paper

- Packaging Paper- Chemicals

- Cement-Building Materials

- Cement-Building Materials- Cement-Building Materials

- Cement-Building Materials

- Cement-Building Materials- Cement-Building Materials

- Packaging Paper

Malaysia & Singapore (1996) Indonesia (1994)

Philippines (1994)

Vietnam (1992)

Laos & Cambodia (1992)

Myanmar (1994)

Total Assets $227 Mil (7,366 MB)

Total Assets $176 Mil (5,713 MB)Total Assets $604 Mil (19,599 MB)

Note: As of June 14

ASEAN assets = $2.4 billion (76,811 MB) (17% of total assets)

International Staff = 15,247 persons (30% of total staff)

SCG’s capacity ranking

Note: as of Dec/13

Thailand ASEAN

Downstream Chemicals 1 1

Packaging Paper 1 1

Cement 1 3

Ceramic tiles 1 1

ASEAN’s low consumption per capita

Plastic (PE+PP) Paper Cement

Note: as of Dec/13

SCG’s capacity (2014)

Chemicals - Naphtha Cracker (consolidated) Chemicals - Associates (equity accounting) Ethylene 1,700,000 tons Dow Chemicals JV (50%) Propylene 1,200,000 tons - LLDPE 650,000 tonsChemicals - Downstream (consolidated) - Propylene Oxide 390,000 tons HDPE 920,000 tons - Specialty Elastomer 220,000 tons LDPE + LLDPE 220,000 tons - PS 140,000 tons PP 720,000 tons - SM 300,000 tons PVC (Thai, Indo, Viet) 886,000 tons - Synthetic Latex 18,000 tons

Mitsui Chemicals JV (20% - 50%)Cement - Building Materials (consolidated) - PTA (50%) 1,440,000 tons Grey Cement (Thai, Cam) 24 million tons - PET (20%) 133,000 tons Ready-Mixed Concrete 550 batching plants - PP Compound (46%) 168,000 tons (Thai, Cam, Myan, Indo, Laos, Viet) - LLDPE Cast Film (45%) 15,000 tons White Cement (Thai, Viet) 0.4 million tons Mitsubishi Rayon JV (47%) Ceramic Tiles (Thai, Indo, Phil, Viet) 225 M sqm - MMA 175,000 tons Roofing Tiles (Thai, Cam, Phil, Viet) 89 M sqm - Cast Sheets 20,000 tons Ceiling & Wall Products 92 M sqm Chandra Asri JV(30%) Autoclaved Lightweight Concrete 27 M sqm - Ethylene 600,000 tons

- Propylene 320,000 tonsPaper (consolidated) - HDPE / LLDPE 336,000 tons Packaging Paper (Thai, Phil, Viet) 2,306,000 tons - PP 480,000 tons Box (Thai, Malay, Sing, Viet, Indo) 1,013,000 tons - SM 340,000 tons Printing & Writing Paper 570,000 tons Bangkok Synthetic (49%) Short Fibre Pulp 470,000 tons - Butadiene 140,000 tons

- SBR 80,000 tons

Note: as of Dec/13

ASEAN Expansion: Indonesia

ASEAN Expansion: Vietnam

Note: as of Dec/13

Hai Duong

Ho Chi Minh City

Chemicals: Integrated Complex Green-field / $4.5 Bn JV with QPI (Qatar) and Vietnamese partners Flex-feed cracker (up to 70% gas feedstock)M&A opportunities – all existing businesses

Future plans:

Operations: (staffs-6,399) Chemicals: PVC, PP compound Paper: packaging paper, box plant Cement – Building Materials: RMC,

ceramic tiles, roofing, trading, and product showroom Investment offices

Binh Duong

Ceramic tiles (Prime Group) - Dec/12 (7,200 MB)M&A / 85% stake / 75 mill sqm.clay roofing plant and raw materials reserved.White cement grinding plant (Buu Long) - Jan/12 (200 MB)M&A / 99% stake / 200,000 tonsChemicals (PVC pipe) - Mar/12 (1,200 MB)M&A / 20-30% stake in local pipe makers150,000 tonsBox plant (Alcamax) – Jan/11 (750 MB)M&A / 69% stake / 53,000 tons

Current: Assets: 19,129 MB ($580 Mill)Total Sales: 16,816 MB (FY2013)

Total Export from Thailand: 5,895 MB (FY2013)

Investments since Q1/11:

ASEAN Expansion: Myanmar, Philippines, Cambodia

Yangon

Nay Pyi Taw

Mandalay

Note: as of Apr/14

Current: Assets: 2,721 MB ($80Mill)Total Export from Thailand: 6,209 MB (FY2013)

Operations: Cement-Building Materials: RMC and trading

office

Ceramics: Mariwasa - Mar/12 (150 MB)

Increased stake to 83% from 46% / 12 mill sqm.

Cement plant - Oct/12 (5,500 MB) Brownfield 0.9 mill tons / mid-15 start

Philippines

Cambodia

Myanmar

Investment opportunities – logistics and others

Mawlamyine

Cement plant – Aug/13 (12,400 MB)Greenfield / majority stake 1.8 MT/ mid-2016 start

Cement plant - Apr/14 (10,000 MB) Greenfield 1.8 mill tons / Q2/17 start

Laos

Future plans:

Cement – Building Materials: 50% stake in regional construction-related retail with Siam Global House Sep/14 (190 MB) Mortar expansion of 2 MT in Lampang and Khon Kaen Sep/16 (2,800 MB) 55% stake in Panel World (2.4 Mill sqm. + 2.4 Mill sqm. in Q4/14) Jul/14 (550 MB) 30% JV with Florim Ceramiche(Italy) (5 mill sqm in Italy, starting in H1/15) (HVA) Apr/14 (506 MB) Two precast concrete plants by mid-2015. Oct/13 (2,500 MB) Greenfield MG Stone Slabs (400,000 tons), start-up in 2015. (HVA) July/13 (1,500 MB) Purchased shares from Monier Group. July/13 (650 MB) Share repurchase from TOTO in sanitary ware (to 71.4% from 35.7%) and fitting assets (to 90.6% from 44.8%). May/13 (2,600 MB) JV in temperature-controlled logistics with Nichirei Logistics Group. (HVA) Apr/13 (575MB) Retail business with a 30% stake in “Siam Global House PLC.” Oct/12 (~10,000 MB) Increased mortar capacity by 50% to 3.1 million tons. (HVA) July/12 (1,000 MB)

Paper Flexible Packaging Business, with a 22% stake in “Prepack” (HVA) May/14 (340 MB) Upgrade paper machine for 60,000 tons/yr Glassine paper (HVA), expected startup in early 2016 Apr/14 (1,825 MB) Nippon paper’s equity injection for a 30% stake in SCG Paper’s Fibrous chain Aug/13 M&A (75%) of two box plants (121,000 tons). May/13 (888 MB) Greenfield Packaging Paper (400,000 tons), start-up within 2014 Oct/12 (6,700 MB) Greenfield Machine Glazed Paper (43,000 tons), 45% JV with Nippon Paper Group. (HVA) Jun/12 (2,200 MB) Upgrade existing pulp facilities to produce Dissolving Grade Pulp. (HVA) July/12 (400 MB) M&A of box plant (Tawana - 61,000 tons). Mar/12 (410 MB)

Chemicals Increase stake in BST from 26% to 49%. Nov/13 (8,028 MB) LDPE coating grade of 60,000 tons, totaling 152,000 tons per year. Apr/13 (2,475 MB) Greenfield LLDPE cast sheet film (15,000 tons), 45% JV with Mitsui Chemicals Tohcello. (HVA) Mar/12 (1,400 MB) Increased stake in Thai Plastic and Chemicals to 91% (from 46%). Mar/12 (11,500 MB)

ASEAN Expansion: Thailand Mainly HVA.

Note: as of Sep/14

Vietnam (2011)0.2 MT white cement grinder

Cambodia 1.0 MT(2008) + 0.9 MT (mid-2015)

Indonesia (mid-2015)1.8 MT plant

Myanmar (mid-2016)1.8 MT plant

Thailand (1913)23 MT plant

Cement – ASEAN presence

Laos (mid-2017)1.8 MT plant

Product types:Product types:

Capacity: Ceramic Tiles 225 mill sqm.

(Italy JV.)

Roofing Tiles 89 mill sqm.

Ceiling & Wall Products 92 mill sqm.

Lightweight Concrete 27 mill sqm.

Thailand RoofingCeramic tiles

OthersIndonesia Roofing

Ceramic tiles OthersPhilippines Roofing Ceramic tilesCambodia RoofingVietnam Roofing Ceramic tiles

Ceramic tiles & building products – ASEAN presence

Chemicals – ASEAN presence

Existing:

Existing StakeOlefins Capacity ('000 tons)

Ethylene Propylene TotalROC SCG 64% 800 400 1,200MOC SCG 67% 900 800 1,700Chandra SCG 30% 600 320 920

Existing total 3,820

Paper – ASEAN presence

Distribution’s network coverageOverseas network coverage with 27 offices in 22 countries, in addition to ASEAN base in distribution, logistics and retail sales.

Cement efficiencyWaste-heat power generators.

Phase 1 2,000 MB Thailand -started in Q1/08Phase 2 350 MB Cambodia -started in Q2/09Phase 3 3,400 MB Thailand -started in Q4/09

total 5,750 MB

Utilize heat from the production process to generate electricity.

…+ASEAN plants

SCG eco valueThailand’s first eco label, accounting for 31% of SCG’s Q1/14 sales, or 38,013 MB.

eco = ecology + economyThe balance of environment, society and economy towards sustainable growth

valueValue for stakeholders, society and environment received from innovative products and services

2010 2011 2012 2013% of total sales 13% 13% 14% 26%

H1/1430%

Cement - Building Materials financials

* EBITDA margin = EBITDA from Operations / Consolidated Sales

Note: Domestic business: domestic sales from Thai operations Structural Products: Grey cement, RMC, Others (mortar, white cement, and lightweight concrete blocks).Housing Products: Roofing products, Board & Wood sub, and Home improvement.Ceramics: includes Sanitary ware and Fittings.

SCG Cement-Building MaterialsDomestic sales segmentation

Note: International business = ASEAN Operations, exports from Thailand, and Trading businessHousing - Roofing products, Board & Wood sub, and Home improvement.Ceramics - includes Sanitary ware and Fittings.Trading - are mainly trading of non-SCG products

SCG Cement-Building MaterialsInternational sales segmentation

Note: EBITDA = EBITDA from operations + dividend from associated companies

Chemicals EBITDA

Chemicals profitability

Paper financials

EBITDA on Assets, and EBITDA Margin

EBITDA on Assets = EBITDA / Consolidated Assets EBITDA margin = EBITDA from Operations / Consolidated Sales

Segmented financials

Sales & Assets:

Sales (MB) 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 H1/14

Consolidated 120,353 128,201 148,865 192,395 218,265 258,175 267,737 293,230 238,664 301,323 368,579 407,601 434,251 246,560

Chemicals 38,152 42,394 50,767 75,185 86,084 122,645 130,223 136,527 101,115 144,317 192,929 203,539 209,997 125,784

Paper 26,995 29,305 33,564 38,265 40,306 42,645 43,890 47,110 42,729 51,714 54,839 57,430 59,135 31,809

Cement 24,183 27,269 30,552 36,658 41,630 44,123 44,087 49,999 46,661 48,954 54,249 67,558

Building Materials 13,046 16,129 18,147 20,542 22,227 22,745 21,281 23,351 26,873 30,719 34,171 41,340 174,642 93,890

Distribution 53,326 52,191 56,551 68,558 76,070 81,519 86,440 102,672 86,641 96,898 111,920 126,690

Assets (MB) 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 H1/14

Consolidated 174,804 167,388 176,566 191,081 199,370 226,264 248,256 285,776 315,992 359,219 373,789 395,573 440,633 462,386

Chemicals 54,284 57,762 67,254 75,186 78,656 109,391 123,205 138,504 165,964 165,087 176,036 176,837 192,063 199,261

Paper 25,844 28,720 32,813 39,128 38,575 40,734 46,454 51,089 47,942 50,127 52,463 58,439 65,169 67,864

Cement 59,618 60,624 56,315 54,801 55,953 57,791 60,132 60,770 60,681 61,018 60,115 66,808


Distribution 7,813 6,864 6,631 7,765 8,560 10,610 11,143 10,903 10,110 12,177 16,234 24,463

Segmented financials

EBITDA & Profit for the Period (MB):

EBITDA (MB) 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 H1/14

Consolidated 28,884 30,418 37,188 54,626 53,507 57,151 50,008 38,783 47,116 45,949 46,253 45,716 61,265 32,479

Chemicals 6,443 6,452 9,851 23,642 19,653 26,199 22,611 12,598 19,482 16,024 14,394 8,628 20,342 10,628

Paper 8,205 9,536 9,819 9,840 9,496 9,634 7,943 6,660 7,901 9,129 8,811 8,844 9,473 5,358

Cement 7,615 7,917 11,581 13,175 13,235 12,200 10,198 11,272 11,616 10,810 12,781 14,824


Distribution 1,268 1,214 602 1,541 1,546 1,498 1,576 1,739 1,581 1,440 1,532 1,564

Profit for the Period (MB) 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 H1/14

Consolidated 7,634 14,604 19,954 36,483 32,236 29,451 30,352 16,771 24,346 37,382 27,281 23,580 36,522 16,913

Chemicals 2,611 5,285 7,777 20,523 16,656 17,574 16,982 6,136 12,556 22,609 11,190 2,690 11,292 4,739

Paper 3,272 4,079 4,424 4,122 3,689 3,574 2,353 1,658 2,286 3,490 3,331 3,560 3,587 2,142

Cement 859 2,006 5,313 6,582 7,916 6,652 5,463 6,006 6,214 6,014 7,288 9,163

Building Materials 410 1,521 2,253 2,700 3,071 1,939 950 778 1,617 1,872 1,476 2,949 16,092 7,559

Distribution 680 586 251 968 1,079 1,021 939 1,211 1,077 1,061 1,075 1,035

vision: asean sustainable business - listed...

Documents