Restructuring of SCG Ceramics set to spur revenue growth

Aug 04, 2023

published : 10 May 2023 at 05:00

newspaper section: Business

writer: Kanana Katharangsiporn

SET-listed SCG Ceramics (COTTO) Plc is expecting its revenue to expand by 2.3 times and anticipates becoming the market leader in Vietnam and the Philippines following its delisting and restructuring process with SCG Decor -- the company's major shareholder.

Managing director Nampol Malichai said COTTO has been scheduled to delist from the Stock Exchange of Thailand (SET) while SCG Decor planned to raise funds through an initial public offering (IPO), with a plan to list its shares on the SET.

"The Siam Cement Plc [SCC] or SCG aims to make its subsidiary SCG Decor the flagship company for floor tiles, wall tiles and bathroom business in Thailand and overseas, and the sole company within the group to operate those businesses," he said.

Currently, SCG has three subsidiaries: SCG Packaging (SCGP), which is listed on the SET; SCG Chemicals (SCGC), which is expected to launch an IPO in the fourth quarter of 2023; and SCG Decor.

SCG Decor has five subsidiaries operating in four countries. In Thailand, its subsidiaries include COTTO, in which it holds an 82.7% stake. COTTO is the market leader in ceramic tiles with a 33% share. Another of SCG Decor's units is Siam Sanitary Ware, market leader in sanitaryware with a 33% share. SCG Decor has a 99% stake in Siam Sanitary Ware.

SCG Decor is also the market leader in ceramic tiles in Vietnam and the Philippines where its subsidiaries are Prime Group and Mariwasa-Siam Ceramics, respectively. They have a market share of 26.4% and 16.8%, respectively.

In Indonesia, SCG Decor's subsidiary is PT Keramika Indonesia, in which it holds a 92% stake. This company has a 4% share of the ceramic tile market.

Following the restructuring, COTTO is expected to see its revenue increase 2.3 times based on its 2022 revenue of 13.1 billion baht. SCG Decor posted revenue of 30.2 billion baht in 2022.

At present, COTTO has a production capacity of 80 million square metres per year for ceramic tiles, while SCG Decor has a production capacity of 107 million sq m for ceramic tiles and 4.3 million units for sanitaryware.

On May 23, 2023, COTTO will have an extraordinary general meeting of shareholders to consider and approve the delisting of the firm's shares from the SET.

SCG Decor will have an IPO and make a tender offer to purchase all shares of COTTO held by other shareholders in exchange for SCG Decor's newly issued ordinary shares.