Siam Cement Group's retail business sees dip in 2023 sales

The retail business of Thai industrial conglomerate Siam Cement Group (SCG)'s building materials distribution unit saw a dip in sales last year due to a challenging market and high comparative base. Data from SCG’s analyst briefing for 2023 show SCG Distribution’s retail sales revenues slipping 2.6 per cent to 3.27 bn Thai baht (THB, EUR 83.37 mio).  For the fourth quarter, retail sales remained almost unchanged at THB 795 mio.

SCG Distribution Co., Ltd. is the company responsible for managing subsidiaries and associated companies that sell cement, building materials, ceramics, sanitary wares and fittings, as well as hand tools, kitchen fixtures, paints and chemicals, and other do-it-yourself products. It divides its business into two segments: distribution and retail.  The retail business is conducted through a wide network of brick and mortar stores and e-commerce channels in Thailand, as well as in other Southeast Asian markets.

"[The] overall market remained challenging. The [fourth quarter] decrease was attributed to the high base in [the fourth quarter of 2022], and is a laggard to the cement demand," SCG explained.

It highlighted that the Thai building materials market fell 2 per cent last year from a 4 per cent growth in 2022. Even so, the high-end residential segment in Thailand saw growth; the mass residential market, on the other hand, was affected by interest rates, the company said.

Meanwhile, business in Indonesia “continued to improve”, buoyed by stronger domestic consumption, even as demand for building materials in Vietnam "decreased" and Cambodia’s construction market "was affected by [the] overall economic situation", the company added.

Extensive reach

The retail segment of SCG Distribution, which sells both SCG and non-SCG products, makes up only 2.7 per cent of the company’s sales,  but its reach is extensive.

Its joint venture with Boonthavorn, an independent home improvement retailer in Thailand, operates more than 30 outlets in its home country, as well as one store each in Cambodia and  Vietnam.

It also has  a 32.94 per cent interest in Siam Global House, one of the biggest home improvement retailers in Thailand. Apart from having 84 stores in Thailand at end-2003, Global House also operates two outlets in Cambodia, and is set to start operations in the Philippines at the end of this year via its subsidiary, Global House Philippines Inc.

SCG Distribution also holds the SCG Group's 50 per cent stake in Global House International, a company…