SCC to Overcome the Weakness

The Siam Cement Public Company Limited (SCC) is Thailand’s oldest cement and building material company. SCC established “SCG’s Home Mart”, a wholesale and retail store, as a channel to distribute its products to market over the past 20 years. As the store focuses on specific products, it can’t meet every customer’s needs and couldn’t reach the mass-market consumer.

To defeat the company weakness, SCC has sought for partnerships in order to add more product lines in stores.  

HomePro (Home Product Center Public Company Limited: HMPRO) was SCC’s first target, but the deal was a fiasco.

By a fortunate coincidence, shortly after the deal with HMPRO failed, Global House or Siam Global House Public Company Limited (GLOBAL), which also operates a warehouse store, was just listed on the stock market….hence SCC decided to acquire a stake in GLOBAL. 

After that SCC teamed up with “Boonthavorn” to form SCG-Boonthavorn Holding Co., Ltd to home-related design solutions retail outlets in Thailand and Southeast Asia. The collaboration with Boonthavorn widens SCC’s warehouse products to more variety, and also benefiting a logistic sector (SCG Express). 

For overseas business, SCC has acquired a stake in PT Catur Sentosa Adiprana Tbk (CSA), an Indonesian modern retailer and distributor of home products. CSA conducts 2 brands namely MITRA10, a leading modern retailer of home products like GLOBAL, and ATRIA, a furniture store like HMPRO.

As of September 1, 2020 the share price of SCC closed at ฿357/share increased ฿3/share or 0.85% with a trading value of 1,252 million baht, meanwhile a day earlier the share gained 3.21% with a trading value of  2,286 million baht amid the market plummet, in response to the news of SCG Packaging Public Company Limited (SCGP)’s listing.

SCC planned to allocate no more than 169,132,500 shares for an IPO to existing shareholders of SCC under pre-emptive rights at the ratio of 7.095 SCC’s shares to 1 new ordinary share of SCGP with an Excluding Other Benefit (XB) date on September 10, 2020, and the Record Date on September 11, 2020.

It is expected that SCGP would enter SET50 upon arrival.

However, the company fundamental remains unchanged and investors still have to bear with SCC’s operating result.