Mr. Aidan John Lynam

Director and Group Chief Executive Officer

Across the entire Siam City Cement Group, 2019 has been a very eventful year, a year in which we celebrated our 50th Anniversary with sustained value creation and reputable service to our customers. Increased revenues and a sharpened focus on internal efficiency and costs optimization, has allowed us to maintain solid profitable growth momentum and to sustain the Company’s development going forward into our 6th decade.

In various parts of our operations whether in Thailand or overseas, the Group however has not been immune from the effects of challenging market conditions, or the effects of wider global economic shifts. Nonetheless, we have managed to post improved results in many areas of our operations with a determined focus on becoming an application-oriented and preferred solution provider to our customers.

In Thailand, the general election took place in March against a background of strong appreciation of the baht which is at its highest point in more than a decade. Compounded by volatile global capital markets and trade wars, this has impacted the Thai economy in general and was seen to affect also the construction business along with a slowdown in residential building activity caused by oversupply. At the same time, the long awaited up-tick in infrastructure investment is happening slower than expected, placing a general drag effect on construction materials sales in many sectors.

Nevertheless, we still managed to grow the top line by positioning our products in the premium range, and by addressing carefully the distribution of cement and concrete for our customers’ needs. Our manufacturing facilities at Saraburi focused on raising reliability so as to maximize available cement and clinker for sale, both domestically and for overseas exports.

Siam City Cement Trading Company Limited increased its customer networks to maximize the utilization of the Saraburi Operations, and to enhance the price realization for our exported products from Thailand. We also increased margins from widened trading activity in other materials related to our industry, delivering to as wide afield as China, Bangladesh and Australia as well as to our own Group entities overseas. In the ever-important arena of waste management services, INSEE Ecocycle Company Limited has increased its activities both in co-processing at our Saraburi facilities, as well as in providing value-added services to industrial customers across Thailand in the oil and gas and petrochemical spaces for example.

Beyond Thailand, our international operations faced various challenging environments during the course of 2019, with tougher conditions being seen in many markets compared with the previous year. Siam City Cement (Vietnam) Limited continued to face increased supply excess particularly from North Vietnam in a situation where demand in its relevant market of southern Vietnam was muted by a slowdown in the licensing of construction projects. The Company partially offset this by effective internal costs control and supply chain optimizations. Meanwhile our business in Sri Lanka improved its performance compared with the prior year in a difficult market environment beset by political uncertainties and a major terrorist attack in Colombo in April. In Indonesia, our fiber cement business has seen improved performance compared with the prior year, whilst in Bangladesh, challenged by adverse economy of scale, our Company faced a difficult 2019 with margins squeezed by increased clinker import prices as well as new government taxes on imported raw materials. Where Cambodia is concerned, our joint venture at Chip Mong INSEE Cement Corporation had a very successful year in 2019, growing profits strongly over the prior year, with its brand-new plant being fully utilized in the country’s ongoing construction boom.

Throughout its 50-year history, the Siam City Cement Group has always taken seriously our responsibility towards the surrounding communities, the society and the environment. The Group’s sustainable development approaches focus on improving our impacts in workplace occupational health and safety, lowering CO2 footprints in all our products and services, managing and reducing precious water consumption, whilst assuring responsible social and biodiversity impacts from our business activities. Unified in our workforce diversity and anchored with our Thai heritage, we strive towards international standards, cross-fertilizing talent, practices and know-how and developing leaders for tomorrow across our entire Group.

We are grateful for the strong trust and support from our shareholders, our Board of Directors, our customers, our communities and our stakeholders. We thank you all, and we assure you that we are totally dedicated to meet and to exceed your expectations in the coming year and in the years to come.