SCG unit sets ambitious plan to double sales, expand trade


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SCG LOGISTICS Management has given itself a tough target to nearly double its sales to Bt30 billion and increase both its non-group and international businesses by 10-fold within five years.

The unit of SCG's Cement-Building Materials business unit had grown its sales by 12 per cent annually from Bt3.7 billion in 2001 to Bt15.5 billion last year, but it still relies heavily on serving other SCG companies, which are expected to contribute the lion's share of 86 per cent of its revenues this year.

Managing director Syamrath Suthanukul said yesterday that thanks to the completions of the Bt500 million, 18,000-square-metre central distribution centre (CDC) in Ayutthaya's Wang Noi district and its advanced IT and logistics systems, SCG Logistics was now confident of achieving its goal to expand its non-SCG customers from Bt430 million at present to Bt4.3 billion in five years.

By then, other SCG companies will have dwindled to 60 per cent of sales, while non-SCG and overseas sales will rise to 30 per cent and 10 per cent.

The overseas business will grow as SCG Logistics follows its parent to establish its logistics subsidiaries in other countries.

The group will start up its first cement plant in Indonesia this year and in Myanmar next year.

The company will also find additional income from its joint venture with Japan's Nichirei Logistics to run a cold-chain logistics business here following the completion of its warehouse, which will be inaugurated on March 2.

"There is plenty of room to grow in the Bt300 billion logistics market. We are already a leader in building materials.

"Now we're just entering the warehouse segment, which has much bigger players like WHA and T-Park (Ticon Logistics Park). On the modern-trade side, there are Linfox and DHL. Our share is little," he said.

To attract small and medium-sized customers, SCG Logistics has launched a "nationwide one-stop service" - an integrated distribution solution that offers next-day delivery services.

The company has earmarked Bt1 billion this year to complete construction of the central distribution centre and installation of various IT systems, including an automated storage and retrieval system on a 13-rack shelving, a six-deck selective rack equipped with forklift trucks, and the latest version of SAP's Extended Warehouse Management solution.

SCG Logistics is expected to grow sales by 12 per cent to Bt17.3 billion this year, of which sales to SCG customers are expected to increase by 8 per cent, to non-SCG customers by 23 per cent and to overseas customer in China, Laos and Cambodia by 30 per cent.

The company serves customers in agriculture goods, energy, such as coal transport, food and beverages, like Amway, Nestle and Heineken beer, and auto parts industries.

SCG Nichirei Logistics will also provide transport services to ice-cream, sandwich and frozen chicken customers, he added.

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