The Siam Cement Public Company Limited (SCC) made a remarkable success late last year after listing its subsidiary, SCG Packaging Public Company Limited (SCGP), into the Stock Exchange of Thailand.
With a raise of 40,000 million baht from its IPO, SCGP utilized 27,000 million baht for further investment and the remaining 13,000 million baht for debt repayment, resulting in more liquidity and lower D/E, while increasing more value to its parent company, SCC, as well.
After the success, SCC is expecting to list its next subsidiary into the Thai stock market, which is SCG Chemicals Co., Ltd. (SCG Chemicals).
The most interesting thing in SCG Chemicals is that cement and construction material business used to be the pipeline for its business. However, the chemical business has emerged and surpassed two of SCC’s core businesses, raising hopes in expecting that this business could become its next flagship to support SCC’s growth.
The only problem is that chemical businesses require a high amount of funds in an investment. Financial institutions come with high interest rates, making this the second option as a source of funds. The most efficient way would be none other than listing the company into the Stock Exchange and raising funds from selling IPO, which has lower cost while adding value to the company for future progress.
Look at SCGP as an example that sits around with almost 30,000 million baht of funds for future investment.
While SCG Chemicals is shaping up for the listing, SCC and SCGP continued to report satisfying 1Q21 earnings. SCC recorded a net profit of 14,913 million baht for the quarter, increased 114% YoY, contributed by a stable revenue of cement and construction material business at 46,185 million baht, an increase of 35% in chemical business to record 51,607 million baht and an increase of 12% in packaging business to record 27,253 million baht.
As for SCGP, the company also reported an outstanding profit growth in 1Q21 at 23% YoY to record 2,134 million baht with an increase of 12% in sales revenue.
Now it is up to SCG Chemicals to turn a duo into a trio.