Positioning Vietnam as a Global Production-Export Hub: SCGD’s Role in Decorative Surfaces and Low-Carbon Cement

Introduction to Vietnam’s Strategic Importance

Vietnam is rapidly becoming a vital player in global manufacturing and exports, particularly in the realm of decorative surfaces and cement production. SCG (Siam Cement Group) is at the forefront of this transformation, leveraging its expertise and investments to position Vietnam as a strategic hub for quality production. With SCG Decor (SCGD) leading the decorative surface materials and ceramic tiles market, the company is driving the expansion of low-carbon products that cater to growing global demands.

SCG’s Investment in Vietnam

Mr. Kulachet Dharachandra, Country Director for SCG in Vietnam, emphasized that the company has invested over $7 billion in the country, representing 28% of SCG’s total assets. This investment spans a diverse range of sectors, from chemicals and cement to building materials and logistics, aimed at both domestic consumption and exports. The focus is not only on enhancing competitive capabilities but also on creating a comprehensive production and supply chain to meet the increasing demands of global markets.

Regional Optimization Strategy

Under the Regional Optimization strategy, SCG synergizes the strengths of both Thailand and Vietnam. This includes the integration of digital technology, artificial intelligence, and automated processes in production. The strategic initiative also adheres to Environmental, Social, and Governance (ESG) principles, ensuring that operations are sustainable and responsible.

Vietnam stands out as a high-growth potential market, thanks to its expanding economy, government support for infrastructure, and a burgeoning middle class. This not only creates a significant local consumer base but also positions the country as an efficient export base capable of meeting the demands of international markets.

SCGD’s Support for PRIME GROUP

SCGD has partnered with PRIME GROUP, the market leader in decorative surface materials in Vietnam, since acquiring shares in 2012. This collaboration is essential for SCGD’s ambition of becoming the ASEAN leader in this sector. The CEO of SCG Decor, Mr. Numpol Malichai, noted that as Vietnam’s economy grows and the middle class expands, there is an increasing demand for high-quality Glazed Porcelain (GP) tiles, particularly in the mid-range to premium real estate segment.

PRIME GROUP reported sales revenue of approximately 5,500 million baht and plans to significantly boost its GP tile production capacity. The current production capacity of 19 million square meters is projected to rise to 25.6 million square meters by 2026 and potentially reach 45 million square meters by 2030. This expansion is not just about increasing capacity but also ensuring competitive production costs, allowing PRIME to vie successfully against global players.

Sustainable Practices and Low-Carbon Initiatives

The focus on environmentally friendly practices is a cornerstone of SCG’s operations in Vietnam. PRIME GROUP has invested in Biomass Gasifier systems, aiming to replace fossil fuels with greener alternatives. This initiative helps reduce energy costs while minimizing greenhouse gas emissions, aligning with Vietnam’s goal to become a strategic export hub for ASEAN and beyond.

SCG Cement and Building Materials has been operational in Vietnam for over 20 years. With 11 companies engaged in various sectors, including cement and roofing, SCG has optimized its production processes to align with the national push for low-carbon products. Mr. Wichet Chuchaeu, Country Director for SCG Cement and Building Materials, emphasized that accelerated government infrastructure investments are driving steady demand for low-carbon cement and other sustainable building materials.

Exporting to Global Markets

With an impressive annual production capacity of 3 million tons of clinker and 4 million tons of cement, Vietnam not only serves as a robust domestic supply base but is also a critical hub for exports. SCG currently exports its low-carbon cement and clinker to multiple continents, including America, Europe, and Asia, creating a significant footprint in global markets.

Through continuous innovation and adherence to environmental performance standards, SCG has earned various certifications, including the Singapore Green Building Product certification. These recognitions highlight the company’s commitment to sustainability, from production processes right through to the finished products.

Business Growth and Quality of Life

SCG’s strategic investments and production optimization under the Regional Optimization framework are set to strengthen its competitiveness. As Vietnam continues to emerge as a central hub for high-quality products, SCG is not only poised for business growth but also plays an essential role in improving the quality of life for its residents. The company’s focus on sustainable development through the promotion of green building materials speaks to broader efforts to build sustainable communities in Vietnam.

Final Thoughts

In summary, SCG’s initiatives in Vietnam represent a multifaceted approach to establishing the country as a global production-export hub. With a commitment to sustainability and high-quality manufacturing, SCG is not only setting the stage for profitable business expansion but also contributing to the health of the environment and the well-being of communities in the region.