SCG Logistics plans regional expansion

“Businesses are not limited to only the domestic market and tend to go abroad. So we need to serve them,” Syamrath Suthanukul, managing director of SCG Logistics Management Co, a wholly owned subsidiary of the country’s largest building-materials firm, said yesterday.
The company will emphasise providing international logistics services as its strategic plan this year. This could push the company’s Bt600 million in overseas revenue to Bt5 billion by 2020.
Incorporated a decade ago, the logistics company has launched services via joint ventures in such countries as Myanmar, Cambodia and China, in Nanning.
It is now forming more ventures in Laos, Indonesia and Vietnam. It expects to complete them by the end of this year and see revenues from them next year.
SCG Logistics Management posted about Bt15 billion in revenue last year and expects to grow by 18 per cent to Bt17.8 billion this year.
“Amid the gloomy economy, we have set the most challenging target for this year’s revenue ... But sales from Asean are bright,” Syamrath said.
The company’s revenue came from three types of customers – organic, which was expected to grow by 14 per cent from sales to SCG’s firms, non-SCG shipments, which were estimated to rise by 30 per cent, and Asean countries.
“This year, we have set the growth target for Asean sales at 77 per cent to Bt1.1 billion,” he said.
However, most of the company’s sales – 85 per cent – were still to other SCG firms. The remaining sales were 11 per cent to non-SCG customers and 4 per cent to Asean.
“We will pursue expansion abroad in the same way as we have done in the domestic market, by mostly shipping to SCG customers and then expanding to shipping to non-SCG customers,” he said.
The company has also invested more than Bt400 million in information technology to develop a cutting-edge logistics system, focusing on integrated management solutions to serve the demands of customers in Thailand and abroad.
The IT improvement should help SCG Logistics deliver the group’s cement, chemicals, and building materials and energy-related products without empty back-hauls.
The company’s driving school could also help manage its non-asset network of 7,500 trucks nationwide owned by 200 other companies as well as bringing them to get jobs abroad.
“We will focus on improving cross-border transport networks, especially in the Greater Mekong Subregion, focusing on three border crossings – Aranyaprathet, Mae Sot and Mukdahan,” Syamrath said.