SCCC announces marketing alliance

The "INSEE Alliance", which include companies producing structures, roofing, walls, flooring, and decorative materials, with leading market shares in their segments and combined sales of more than Bt50 billion annually, will bundle their product offerings to project developers and modern-trade stores.

Siva Mahasandana, SCCC deputy chief executive and senior vice president of marketing and sales, said the INSEE Alliance would initially aim at project developers.

"We will bundle products within SCCC group and external partners, and share our distribution channels and knowledge, as well as in the modern-trade channel," he said.

SCCC has already started to bundle its product offerings to modern trade stores with pioneer partners such as JBP International Paint, Viva Industries, and Ceramic Roofing Products. These pioneer partners and the newer members of the INSEE Alliance will also gain access to SCCC’s nationwide distribution network of 3,500 outlets.

The INSEE Alliance will help SCCC and its partners leverage their distribution networks, offering benefits to their customers in terms of enhanced varieties of products and sourcing costs, Siva said.

The collaboration is seen as part of SCCC’s attempt to leverage against its bigger rival Siam Cement Group, which markets a much more complete range of building materials. SCCC is the second-largest cement maker in Thailand, after SCG.

SCG’s sales of cement and building materials totalled about Bt180 billion last year.

Other INSEE Alliance partners are Siam City Concrete, INSEE Superblock, Conwood, Thai Gypsum Products, UMI Group, Eco Coat, Karat Faucet, and Aqua Line Pro Target. The partnership will expand to include chemicals and sanitary ware.

"Looking from a value perspective, our customers will really benefit," Siva said.

"First of all, we can reduce our costs, especially on marketing, because we can do joint advertising and promotions. Second, we can share resources, especially distribution channels, such as when approaching project developers, in that we will offer a complete range of quality solutions to them.

"Third, we can share knowledge about our customers and their needs and develop innovations and solutions for each customer group."

Sarawut Rachanakul, managing director of JBP International Paint, said the alliance did not involve strict or contracts and would start with residential-project sales before moving into modern-trade channels, including SCCC’s new modern retail outlets.

Thai Gypsum commercial director Thongchai Kamolpattana said the firm expected to gain from the alliance in terms of strengthening its distribution network as well as in brand building.

"We have not sold our products at some SCCC agent shops and now we can sell in at least 100 more of them," he said.

Meanwhile, Siva said the departure of Holcim, which sold its remaining 27.5-per-cent stake in SCCC to Hong Kong-based conglomerate Jardine Matheson Holdings and other institutional investors in March, had not affected the firm’s ability to sell its cement to overseas markets. Instead, SCCC will have more "freedom" and flexibility to sell its cement to any market and will export about 3 million tonnes of cement this year, much more than last year, he said.

"We may have some more difficulties to find ready-made solutions [that Holcim, as a global cement maker, could offer], but since we knew about this [divestment] in advance, we had time to prepare commercial and technical solutions," he said.

SCCC and its three subsidiaries Siam City Concrete, INSEE Superblock and Conwood have combined annual sales of about Bt34 billion. SCCC holds 28 per cent of the Thai cement market.

Karat Faucet claims 7.5 per cent of the market for faucets and bathroom accessories. Thai Gypsum claims a 35-per-cent share of the gypsum-board sector. JBP claims 4.5 per cent of the decorative-paints market. Eco Coat claims 50 per cent of the water-based special coatings segment. Viva claims a 50-per-cent share of the cement-bonded particleboard market. UMI has a 13-per-cent share of the ceramic-tile market.

Ceramic Roofing Products and Aqua Line are newcomers to their markets.