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NDR in Europe Mar 20, 2015 Vision: ASEAN Sustainable Business Leader Strategies: 1. ASEAN Expansion 2. High Value Added products & services (HVA) Industry Leader (Construction Materials) 2014 / 2013 / 2012 / 2011

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Page 1: Cement – Building Materials

NDR in EuropeMar 20, 2015

Vision:  ASEAN Sustainable Business LeaderStrategies: 1. ASEAN Expansion

2. High Value Added products & services (HVA)

Industry Leader (Construction Materials) 2014 / 2013 / 2012 / 2011

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Agenda

Strategies & Key Points Business Updates Sustainability & People Financials Appendix

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Summary: Recent investment & new plant starts

Cement – Building Materials: Global House Int’l: 50% JV with Siam Global House towards regional construction-related retail (200 MB) Mortar: 2 MT capacity expansion (Lampang and Khon Kaen) (2,800 MB) – H1/16 start Woodchip Cement Board: 55% stake M&A in Panel World, with cap of 2.4 Mill sqm. (550 MB) Cement plants: (Laos, Myanmar, Indo, Cambodia) 6.3 MT (39,000 MB - $1,300 M) – Q2/15 - Q2/17 starts. Ceramic (Italy): 33% JV, 5 Mill sqm. (506 MB) - H1/15 start Precast concrete: two precast plants totaling 2.4 Mill sqm (2,500 MB) – Q1/15 start MG Stone Slabs: 400,000 sqm. green-field (1,500 MB) – Q2/15 start.

Chemicals: Norner Group (Norwegian innovation and technology): 51% stake M&A (340MB) Debottleneck of Chandra Asri (Indonesia): Ethylene capacity gained up 43% - end of 2015 start LDPE coating grade (HVA) of 60,000 tons, totaling 152,000 tons per year, by mid-2016 in Thailand.

Paper:Fibrous chain: Glassine paper (HVA): 1,825 MB , Upgrade paper machine for 60,000 tons/yr – Q2/16 start Nippon paper’s 30% stake in SCG Paper’s Fibrous chain.Packaging chain: Flexible Packaging (HVA): 72% stake M&A in Prepack of 14,000 tons (1,500 MB) Box plants

- Indonesia (Indoris): 90% stake M&A, 8,000 tons (290 MB) Packaging paper in Thailand: 400,000 tons brown-field (6,700 MB).- Q4/14 start

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Cement and Building Materials: New cement plants in ASEAN. Acquire building materials assets.

Chemicals: Flexible feedstock cracker (Vietnamese complex). Debottleneck Chandra Asri (Indonesian cracker).

Paper: Gear towards packaging solution. Improve productivity in the fibrous chain.

Expansion into ASEAN: CAPEX and Investment

Majority of the CAPEX & Investment

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Expansion into ASEAN: FY2014 ASEAN Sales

Total Exports30%

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CAPEX & Investments:Forecasted FY2015 CAPEX & Investments of 50,000 – 60,000 MB.

- CAPEX includes debottlenecking, expansion projects, and major turnaround.- Investments are acquisitions and purchase of shares.

0

10

20

30

40

50

60

70

80

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Billion Baht

10.0

3.5

10.3 8.55.7

11.9 14.019.1

23.627.2

42.4

34.5

18.4

32.0

47.050.0

45.2

Total CAPEXFY2015 - FY2019

200 to 250 Billion Baht

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R&D Product and Design Team

R&D and Product Design Team:Budgeted 4,800 MB in FY2015

(# of staff / Jan/15)

364 (Ph.D. 9) 1,519 (Ph.D. 101)2007 Jan/15

R&D Spending

Note: includes recent acquisition of Norner Group (Norway) 50 R&D staffs (9 Ph.D.)

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HVA Strategy(High value added products and services)

HVA’s Revenue from Sales

HVA attributes: 5-10% higher margin Performance Solutions provider

Service & Design Branding

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HVA examples

Cement-Building Materials

“ Color rendered mortar”

“Roofing solution”

“Large format ceramics”

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Chemicals

“ Medical grade plastic”

“Wire & Cable”“ Automotive Cluster”

“ EU-certified PE water pipe”

“Roto molding”

HVA examples

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Packaging & Paper

“ Lightweight packaging solution”

“Less paper-Same strength”“Up to 25% lighter”

“Glassine paper”“Flexible Packaging”

HVA examples

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Agenda

Strategies & Key Points Business Updates Sustainability & People Financials Appendix

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Net profit segments

Other = mainly SCG Investment and Corporate

Drivers:Cement = Local

Chemicals = Global Paper = Regional

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SCG Cement-Building Materials

Distribution Wholesale Retail Home solutions Logistics

“ASEAN Market Facing Platform”

Structural Products Cement efficiency RMC integration Precast concrete Lightweight concrete block Mortar

Housing Products + Ceramics No.1 ceramic tile capacity, globally Roofing materials Fiber-cement products

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SCG Cement-Building Materials

Domestic Portfolio International PortfolioExport from Thailand

ASEAN Operations

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Cement – ASEAN presence: Thai domestic market share of 40%

Indonesia 1.8 MT

Myanmar 1.8 MTThailand 23 MT

Laos 1.8 MT

Vietnam 0.2 MTCambodia 1.1 MT + 0.9 MT

NEW PLANTS: Start up

Cambodia 0.9 MT mid-2015Indonesia 1.8 MT H2/15Myanmar 1.8 MT mid-2016Laos 1.8 MT mid-2017

6.3 MT

EXISTINGThailand 23 MT

Cambodia 1.1 MT

Vietnam 0.2 MT

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ASEAN cement markets in 2014

60

2 18

56

69

77

0

20

40

60

80

Laos Cambodia Myanmar Thailand Indonesia Vietnam

MT- Domestic demand- Domestic capacity

50Export

40

51

Export

58

7Import

Import

Import 4

67

42Import 3

1

Ex Factory price ($/Ton): $70-75 $70-80 $70-75 $55-60 $70-75 $45-50Demand Growth (%): 6% 10% 11% -1% 3% 11%

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Indonesia: demand is predominantly bagged cement

40 MT

Bagged40%

Bulk60%Bagged

80%

Bulk 20%

60 MT

Thailanddemand

Indonesiademand

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Indonesia: large and diversified market

Distance Indonesia ThailandEast to West 5,271 km 490 km

North to South 2,210 km 1,650 km

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130 km.

Indonesia: SCG’s cement plant location in Sukabumi

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Cement: Thailand supply and demandThai domestic market share of 40%

Total Domestic Growth Rate (% y-o-y)- 10% -45% 15% -8% -1% 23% 6% 11% 9% -2% -6% -6% 1% 10% 3% 12% 7% -1% 6%

0

10

20

30

40

50

60

1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015e

MT Thai cement market – all players

Utilization +85-90%

Capacity60MT

Domestic

Export

Avg. 7%

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Cement: domestic market segments

Residential(50-52%)

CommercialRetail

(18-20%)

Gov’t(28-30%)

FY2013 FY2014 H1/14 H2/14

7% -1% 2% -3%

20% +1% 9% -6%

3% -1% 0% -2%

6% -1% 0% -2%

Market Growth (% y-o-y)

Segments

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Thailand: domestic cement price of $61/ton (ex-factory)

$61/tonex-factory

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4.76.0 7.1 7.6

6.2 6.1 6.8 7.0 8.1 8.2 7.6 7.3 6.4 5.74.0 4.4

22 24 22 2124

27

34 35 34

40 3841

45

5257

0.0

10.0

20.0

30.0

40.0

50.0

60.0

70.0

0.0

5.0

10.0

15.0

20.0

25.0

30.0

35.0

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Thailand: SCG’s cement exports (FOB prices)

Export Volume (MT)

Export Prices$/ton

Bagged cement % : 11% 17% 31% 30% 42% 61% 66%

$61/tonFOB

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Source: Ministry of Transport

Thailand: 2.4 trillion Baht infrastructure plan

Mass Transit (trains, bus, etc)

46%

Provincialhighways / roads

28%

Dual-track railways

16%

Others10%

direct cement demand of <10 MT (8-10 years)

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Cement: Thailand mass transit

A) 2016 ground break (contractor finalized 2015)• orange line / 40 km• pink line / 36 km• yellow line / 30 km• airport link extension

B) 2015 ground break (contractor finalized 2015)• green line / 18 km

C) under construction• purple line 23 km (Sept/16)• red line 26 km (2019)• blue line 27 km (2017)• light green 9 km (2017)

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Cement: other infrastructure projects

A) Medium-speed train (1.4 meter track) Chinese Government

3 lines = 1,060 km • Linking China to ASEAN• Ground break in late 2015• Negotiations are on loan term

Japanese Government3 lines = 1,760 km• Linking Bangkok to Chiang Mai• East-West corridors

B) Dual-track (1 meter track)• 6 lines = 1,082 km, and 147,900 MB• ground break 2016 (contract signed

2015)• additional 6 lines being planned

C) Provincial highways & roads• North East – 3 projects (3,185 MB)• West – 1 project (1,400 MB)• East – 1 project (1,400 MB)• other numerous smaller projects• ground break 2015

(contract signed 2015)

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Housing Products Ceramics Tiles (floor & wall)1. Roofing Tiles

2. Fiber Cement Products (ceiling and wall)

Types of tiles• Fiber Cement roof tiles• Concrete roof tiles• Ceramic roof tiles

Formats:from mosaics to slabs (1.5 x 3.4 meter)

SCG’s others products

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SCG’s ceramics: Largest global capacity (225 Mill sqm).

Competitiveness: Economies of scale Global branding Digital printing Dry grinding process Gasification system

SCG’s Capacity 225 Mill sqm.Thailand 106

Vietnam 75

Indonesia 32

Philippines 12

ASEAN production rationalization.

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33 35 33 3235

50 51 50 49 53 51 51

0

30

60

90

120

150

0

10

20

30

40

50

60

70

80

90

100

Q1/12 Q2/12 Q3/12 Q4/12 Q1/13 Q2/13 Q3/13 Q4/13 Q1/14 Q2/14 Q3/14 Q4/14

Baht/sqm.M sqm.

Avg. price

Sales volume

SCG’s ASEAN subsidiaries

SCG’s ceramic sales

consolidation of Prime Group (Vietnam)

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SCG Chemicals: ASEAN portfolio

Flexible products (metathesis)

Thailand VietnamCrackers (SCG 2/3, DOW 1/3)

ROC(1999)

1.2 MT C2 + C3

MOC(2010)

1.7MT C2 + C3

Downstream

Subsidiaries Associates

PEPP

PVCOthers

Dow Mitsui

Chemicals Mitsubishi

Rayon JSR

Indonesia Cracker (SCG 30%)

CAP(1995)

0.9 MT C2 + C3

De-bottleneck(Late-2015)

1.3 MT C2 + C3

Cracker (SCG 46%)

Long Son Petrochemical (LSP) - $4.5 Billion

1.4 MT C2 + C3

Status update:• SCG 46%,

PetroVietnam 29%, Qatar Petroleum Int’l 25%

Completed:• Long-term feedstock • Land lease 400 hectare• Plant Engineering completed• On-going loan discussion

Downstream

Subsidiaries Associates

PEPPSMBD

Michelin SSBR (Start up 2017)

Flexible R/M (gas up to 70%)

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Chemicals outlook

PE (C2) consumer goods

PP (C3) capital goods

MMA (C4) consumer / capital goods

BD (C4) rubber substitutes

PVC construction related

PTA textiles industry

olefins

aromatics

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Historical margin: HDPE – Naphtha

0

100

200

300

400

500

600

700

800

900

1,000

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

$/ton

Trough $300/ton

Trough$400/ton

Asian crisisUS crisis

EU crisis

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%

3%

8%

5%

1%

4%3% 3%

Ethylene world supply growth

Incremental supply growth (MT):

“Flood of supply”

4% 4% 4% 4%3% 3%

4%5%

4%

2.8 4.4 4.6 4.7 4.7 3.5 10.5 6.9 2.0 5.0 4.5 5-6 5-7 6-8 7-9 6-8

Note: as of Dec/14

Potential capacity delay: Permit delay Execution risk Feedstock security

0123456789

10

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

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Ethylene world capacity: Naphtha and conventional gas = 86% of world’s capacity

Ethylene world capacity (2019)

New capacity by region (2015 - 2019)

16%25%

32%27%

31%15%

14%

32%35%

10%

4%

51%

10%

30%

23%

15%

22%

Naphtha

Conventional Gas

New shale gas cracker

CTO + MTOand Others

N. Asia

N. America

EuropeM/E

S/E Asia

6 crackers = 4% of the world’s capacity. 6 yrs required from planning to startup

near Mongolia (coal reserves) with water scarcity. 5x greater water usage than conventional. 2.5x higher investment cost than conventional. deleted from China’s investment tax promotion.

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28%

14%

9%

49%

Propylene world capacity: Naphtha and refinery = 77% of world’s capacity

Propylene world capacity(2019)

Naphtha

CTO & MTO& others

Refinery

PDH gas cracker

shale + LPG are 14% (20MT) of the world capacity. seasonal higher prices ($100/ton to $200/ton) than

naphtha during the winter.

New capacity by region (2015 – 2019)

4%

18%

61%

10%

7%

North Asia(mainly PDH)

N. America

EuropeM/E

S/E Asia

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HDPE – Naphtha Price Gap

Note: Prices refer to SEA regional prices

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PP – Naphtha Price Gap

Note: Prices refer to SEA regional prices

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PVC

Prices refer to FE regional prices

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Price gaps of associates

Note: BD and MMA prices refer to SEA regional prices , PTA prices refer to Asian regional prices

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InternalCorrugated Box

ExternalContainerboard

Paperboard

SCG Paper: …is essentially a packaging business

Internal Eucalyptus Pulp

P&W Paper

Dissolving Grade Pulp

Fibrous chain 21%

FY2014 EBITDA(9,718 MB)

Packaging chain 79%

11% EBITDA Margin

17% EBITDA Margin

2.3 MT

470 KT

570 KT

1.0 MT

96 KT

Packaging Chain - Rengo’s 30% stake in all corrugated box businesses and Vietnam’s packaging paper operations.

Fibrous Chain - Nippon Paper’s stake of 30%

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SCG Paper: historical performance

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SCG Paper: growth strategies

Regional / Geographical Growth (Targets: Vietnam and Indonesia)

Growing thru HVA Products / Services (such as High Performance Paper and Packaging)

Packaging Chain“Growing Packaging Business in ASEAN”

Primary Packaging

• Product protection• Marketing tools• Flexible packaging,

rigid, glass, or metal

Primary Packaging

• Product protection• Marketing tools• Flexible packaging,

rigid, glass, or metal

Secondary Packaging

• Marketing tools• Information• Mainly paper-based

packaging; folding carton

Secondary Packaging

• Marketing tools• Information• Mainly paper-based

packaging; folding carton

Tertiary Packaging

• Logistics / transportation

• Handling / inventory management

• Corrugated container

Tertiary Packaging

• Logistics / transportation

• Handling / inventory management

• Corrugated container

Other Packaging

• Logistic support • Retail packaging

Other Packaging

• Logistic support • Retail packaging

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SCG Paper: growth strategies

Fibrous Chain – business transformation

WoodWood

PulpPulp

P&W PaperP&W Paper

Fibrous MaterialsFibrous

Materials

Non-P&W PaperNon-P&W Paper

Dissolving Grade PulpApplication:

Rayon Fiber (textile)

JV with Nippon Paper Industries (30%)JV with Nippon Paper Industries (30%)

Positive GDP linkage

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Packaging chain prices

Note: regional prices

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Note: regional prices

Fibrous chain prices

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SCG InvestmentContribution in FY2014 was 2,824 MB in equity income, and another 3,998 MB from dividend income.

SCG InvestmentManaged by the CFO

Siam Kubota Leasing

Siam Kubota Metal Tech

Siam Toyota Manufacturing (4%)

Automotive business

Toyota Motor Thailand (10%)

Siam Yamato Steel (10%)

OthersAgricultural business

Siam Kubota Corp (40%)

Musashi Auto Parts (21%)

Maxion Wheels (30%)

Aisin Takaoka Group (30%)

Note: 10% divestment of Michelin(Thailand) in Q1/15

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Agenda

Strategies & Key Points Business Updates Sustainability & People Financials Appendix

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Cross-cultural diversity& to prepare and encourage

Thai staffs to go overseas

Local Staff Engagement

Local Community Concerns

ASEAN challenges

Acquisition of assets is just the first step...

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Systematic training roadmap

*

*

*

*

*

* = international programs

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External training programs

Program Current Since Classes Staffs

AMP – Advanced Management Program HarvardWharton

19822007

327

8114

EDP – Executive Development Program IMDColumbia

20142007

14

45177

MDP – Management Development Program WhartonDuke

19802011

304

1,418225

Marketing Excellence ProgramKellogg 2006 9 615

Note: as of Aug/14

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Corporate scholarship: 490 scholarships since 1973

MBA Engineering and Specialist as of Jan/15

Note: 370 scholarships are active, others have mostly retiredCurrent 75 students: MBA 17, Engineering 42, Specialist 16

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ranked by

: ranked “Gold Class” which is top group for each sector.

: initial year of DJSI membership.

2014-2008

2014 / 2013 / 2012 / 2011 : Industry Leader(Construction Materials)

2004

DJSI was established in 1999 as the first global index to monitor sustainability of listed companies.

+60 global funds in 16 countries follow the DJSI. For further details: www.sustainability-index.com

DJSI: Dow Jones Sustainability Index

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DJSI: SCG’s rankings

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Agenda

Strategies & Key Points Business Updates Sustainability & People Financials Appendix

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Revenue from sales

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Note: EBITDA includes dividend received

EBITDA

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Equity Income

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Profit for the period

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40,000

30,000

15,000

25,000

50,00045,000

25,000

6,500

0

10,000

20,000

30,000

40,000

50,000

60,000

2012 2013 2014 2015 2016 2017 2018 2019

Mainly retail investors.

No debt covenant.

Thai Baht, mainly 4 years fixed.

“A” rating by Fitch.

Unsecured, unsubordinated.

MB

NOTE: - Debentures amount to 151,500 MB, as of Oct/14.- Oct/14 matured debenture of 5 Billion Baht (3.85% coupon), was refinanced with a 10 Billion Baht issuance (3.9% coupon).

Debenture profile

Debenture Maturity Table

OutstandingMatured

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Net debtInternal leverage target of 2.5 times (Net debt / EBITDA)

CAPEX = 320 Billion Baht

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Dividend payout

Note: Dividend policy established in 2008

Payout policy of 40-50%

100 yrspecial

dividend

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Agenda

Strategies & Key Points Business Updates Sustainability & People Financials Appendix

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Company background

Founded in 1913. Listed in 1975 on the SET. Market cap approximately of $19 Billion (as of Feb/15) Free float of 70%.

Key figures (FY2014): Assets of 465.8 Billion Baht ($14.3 Billion) Net Sales 487.6 Billion Baht ($15.0 Billion) EBITDA 66.5 Billion Baht ($ 2.0 Billion) Net Profit 33.8 Billion Baht ($ 1.0 Billion) 51,100 staffs.

Chemicals

Paper

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Shareholders

CPB 30%LocalRetail / Inst

36%

Local 66%– Institution / Retail 36%– CPB 30%

Foreign 34%– Foreign Board 25%– NVDR 9%

Feb/15

- CPB (Crown Property Bureau ) = Asset management arm of monarchy

Local 66%

Foreign 34%

Foreign Board 25%

NVDR 9%

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Board of Directors

Management Committee

CFO & Investment

SCG Paper

SCG Chemicals

President & CEO

Audit Committee

Internal Audit Office

Corporate Administration

SCG Investment

Governance and Nomination Committee

Remuneration Committee

SCG Cement - Building Materials

Organization chart

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Senior managements

Chaovalit Ekabut VP, CFO - SCG

President - SCG Investment

Tanawong AreeratchakulVP - SCG

Aree ChavalitcheewingulVP - Regional Business

Nithi PatarachokeVP – Domestic Market

Cholanat YanaranopSVP - SCG, President - SCG Chemicals

Somchai Wangwattanapanich VP - SCG Chemicals

Pichit MaipoomSVP - SCG,

President - SCG Cement-Building Materials

SCG Chemicals SCG Cement-Building Materials

SCG Investment Corporate Administration

Kan Trakulhoon President & CEOSCG

Roongrote RangsiyopashEVP - SCGPresident - SCG Paper

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SCG’s Presidents

100 Years

Danish Managements Thai Managements

1. Oscar Schultz(1914- 1925)

2. Erik Thune(1925- 1934)

3. Carsten Friis Jespersen(1935- 1959)

4. Viggo Fred Hemmingsen(1959- 1974)

5. Boonma Wongswan(1974- 1976)

6. Sommai Hoontrakool(1976- 1980)

7. Charas Xuto(1980- 1984)

8. Paron IsrasenaNa Ayudhya (1985- 1992)

9. Chumpol NaLamlieng(1993- 2005)

10. Kan Trakulhoon(2006- Present)

1913 - 1974 1975 - 2014

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Encouraging “Open & Challenge” 

Live 4 Core Values• Adherence to Fairness• Dedication to Excellence• Believe in the Value of the Individual• Concern for Social Responsibility

Open:• Open-minded & Deep Listening

• Eager to learn

• Networking & Collaboration

• Learning from mistakes

Challenge:• Challenge status quo

• Think-out-of the box

• Assertive

• Risk taking

• Willing to take initiatives

+

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Operational history

Crisisof

1997Organic growth

Takeover New industries

1913 - 1970’s 1970’s - 1980’s 1980’s - 1990’s

“Historic roots” “Opportunistic” “Partner of choice”

Cement Construction Materials Steel

Ceramics Paper & Packaging

Chemicals Automotive Electrical

1998 - 2003

Restructure

2004 - onwards

ASEAN&

HVA

Cement – Building Materials Chemicals Paper Investment

Today…..

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Past

Current Green field & M&AMostly ASEAN Cash-flow financed Cash on hand of 31,643 MB

Mostly green field Mostly Thailand Cash-flow financed

CAPEX & investments

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SCG’s operations

Cement plants - RMC, mortar, ALC, - service-based (mortar spraying) + raw materials precast, roofing, - solution-based (speed renovation) + energy ceiling and wall - differentiated products (sizes, texture)

- distribution channels (modern trade and home solutions)

Global scale crackers - PE, PP, PVC, - compounding (PE & PP)+ 25% gas feedstock C4 chain - PVC fabrications & construction,

- C4 synthetic rubber, etc

Packaging paper - packaging solutions, - customized packaging+ recycling waste paper packaging products - lightweight/pre-printed box, etc

Short fibre pulp - paper & non paper - machine glazed paper, glassine+ internal pulp eco-friendly paper,

dissolving-grade pulp

Upstream Downstream HVA products

Integration and Efficiency value creation

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ASEAN assets = $2.6 billion (84,875 MB) (18% of total assets)

International Staff = 15,744 persons (31% of total staff)

ASEAN assets

Note: as of Dec/14

- Packaging- Chemicals

Total Assets $1,192 Mil (39,303 MB)Total Operation 6,035 staffs

Total Assets $21 Mil (699 MB)Total Operation 146 staffs

Total Assets $212 Mil (7,004 MB)Total Operation 1,080 staffs

- Paper

- Paper & Packaging- Chemicals

- Cement-Building Materials

- Cement-Building Materials- Cement-Building Materials

- Cement-Building Materials

- Cement-Building Materials- Cement-Building Materials

- Packaging

Malaysia & Singapore (1996) Indonesia (1994)

Philippines (1994)

Vietnam (1992)

Laos & Cambodia (1992)

Myanmar (1994)

Total Assets $264 Mil (8,686 MB)Total Operation 484 staffs

Total Assets $198 Mil (6,521 MB)Total Operation 184 staffs

Total Assets $688 Mil (22,662 MB)Total Operation 6,496 staffs

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Note: as of Dec/14

ASEAN Expansion: Indonesia

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ASEAN Expansion: Vietnam

Note: as of Dec/14

Hai Duong

Ho Chi Minh City

Chemicals: Integrated Complex Green-field / $4.5 Bn JV with QPI (Qatar) and Vietnamese partners Flex-feed cracker (up to 70% gas feedstock)M&A opportunities – all existing businesses

Future plans:

Operations: (6,496 staffs) Chemicals: PVC, PP compound Paper: packaging paper, box plant Cement – Building Materials: RMC,

ceramic tiles, roofing, trading, and product showroom Investment offices

Binh Duong

Ceramic tiles (Prime Group) - Dec/12 (7,200 MB)M&A / 85% stake / 75 mill sqm.clay roofing plant and raw materials reserved.White cement grinding plant (Buu Long) - Jan/12 (200 MB)M&A / 99% stake / 200,000 tonsChemicals (PVC pipe) - Mar/12 (1,200 MB)M&A / 20-30% stake in local pipe makers150,000 tonsBox plant (Alcamax) – Jan/11 (750 MB)M&A / 69% stake / 53,000 tons

Current: Assets: 22,662MB ($688 Mill)Total Sales: 28,128 MB (FY2014)Total Export from Thailand: 7,996 MB (FY2014)

Investments since Q1/11:

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ASEAN Expansion: Myanmar, Philippines, Cambodia

Yangon

Nay Pyi Taw

Mandalay

Note: as of Dec/14

Current: Assets: 6,521 MB ($198 Mill)Total Export from Thailand: 8,750 MB (FY2014)Operations: Cement-Building Materials: RMC and trading

office

Ceramics: Mariwasa - Mar/12 (150 MB)

Increased stake to 83% from 46% / 12 mill sqm.

Cement plant - Oct/12 (5,500 MB) Brownfield 0.9 mill tons / mid-15 start

Philippines

Cambodia

Myanmar

Investment opportunities – logistics and others

Mawlamyine

Cement plant – Aug/13 (12,400 MB)Greenfield / majority stake 1.8 MT/ mid-2016 start

Cement plant - Apr/14 (10,000 MB) Greenfield 1.8 mill tons / Q2/17 start

Laos

Future plans:

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Cement – Building Materials: Regional construction-related retail – 50% JV with Siam Global House Sep/14 (200 MB) Mortar expansion of 2 MT in Lampang and Khon Kaen Sep/16 (2,800 MB) Panel World 55% stake M&A (2.4 Mill sqm. + 2.4 Mill sqm. in Q4/14) Jul/14 (550 MB) Florim Ceramiche (Italy) – 33% JV (5 mill sqm in Italy, starting in H1/15) (HVA) Apr/14 (506 MB) Precast concrete – 2 plants by mid-2015. Oct/13 (2,500 MB) Greenfield MG Stone Slabs (400,000 tons), start-up in 2015. (HVA) July/13 (1,500 MB) Purchase all shares of Monier Group. July/13 (650 MB) Purchase share of TOTO in sanitary ware (to 71.4% from 35.7%) and fitting assets (to 90.6% from 44.8%). May/13 (2,600 MB) Logistics (temp-controlled) JV with Nichirei Logistics Group. (HVA) Apr/13 (575MB) Construction retail trade - 30% stake M&A in “Siam Global House PLC.” Oct/12 (~10,000 MB) Mortar expansion of capacity by 50% to 3.1 million tons. July/12 (1,000 MB)

Paper Flexible Packaging Business, with a 72% stake M&A in “Prepack” (HVA) Jan/15 (1,500 MB) Upgrade paper machine for 60,000 tons/yr Glassine paper (HVA), expected startup in early 2016 Apr/14 (1,825 MB) Nippon paper’s equity injection for a 30% stake in SCG Paper’s Fibrous chain Aug/13 M&A (75%) of two box plants (121,000 tons). May/13 (888 MB) Greenfield Packaging Paper (400,000 tons), start-up within 2014 Oct/12 (6,700 MB) Greenfield Machine Glazed Paper (43,000 tons), 45% JV with Nippon Paper Group. (HVA) Jun/12 (2,200 MB) Upgrade existing pulp facilities to produce Dissolving Grade Pulp. (HVA) July/12 (400 MB) M&A of box plant (Tawana - 61,000 tons). Mar/12 (410 MB)

Chemicals Increase stake in BST from 26% to 49%. Nov/13 (8,028 MB) LDPE coating grade of 60,000 tons, totaling 152,000 tons per year. Apr/13 (2,475 MB) Greenfield LLDPE cast sheet film (15,000 tons), 45% JV with Mitsui Chemicals Tohcello. (HVA) Mar/12 (1,400 MB) Increased stake in Thai Plastic and Chemicals to 91% (from 46%). Mar/12 (11,500 MB)

ASEAN Expansion: Thailand Mainly HVA.

Note: as of Sept/14

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SCG’s capacity (2014)

Chemicals - Naphtha Cracker (consolidated) Chemicals - Associates (equity accounting) Ethylene 1,700,000 tons Dow Chemicals JV (50%) Propylene 1,200,000 tons - LLDPE 650,000 tonsChemicals - Downstream (consolidated) - Propylene Oxide 390,000 tons HDPE 920,000 tons - Specialty Elastomer 220,000 tons LDPE + LLDPE 220,000 tons - PS 140,000 tons PP 720,000 tons - SM 300,000 tons PVC (Thai, Indo, Viet) 886,000 tons - Synthetic Latex 18,000 tons

Mitsui Chemicals JV (20% - 50%)Cement - Building Materials (consolidated) - PTA (50%) 1,440,000 tons Grey Cement (Thai, Cam) 24 million tons - PET (20%) 133,000 tons Ready-Mixed Concrete 550 batching plants - PP Compound (46%) 168,000 tons (Thai, Cam, Myan, Indo, Laos, Viet) - LLDPE Cast Film (45%) 15,000 tons White Cement (Thai, Viet) 0.4 million tons Mitsubishi Rayon JV (47%) Ceramic Tiles (Thai, Indo, Phil, Viet) 225 M sqm - MMA 175,000 tons Roofing Tiles (Thai, Cam, Phil, Viet) 89 M sqm - Cast Sheets 20,000 tons Ceiling & Wall Products 92 M sqm Chandra Asri JV(30%) Autoclaved Lightweight Concrete 27 M sqm - Ethylene 600,000 tons

- Propylene 320,000 tonsPaper (consolidated) - HDPE / LLDPE 336,000 tons Packaging Paper (Thai, Phil, Viet) 2,306,000 tons - PP 480,000 tons Box (Thai, Malay, Sing, Viet, Indo) 1,013,000 tons - SM 340,000 tons Printing & Writing Paper 570,000 tons Bangkok Synthetic (49%) Short Fibre Pulp 470,000 tons - Butadiene 140,000 tons

- SBR 80,000 tons

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Incremental capacity

-2007 2008 2009 2010 2011 2012 2013 2014 2015 2007 2008 2009 2010 2011 2012 2013 2014 2015

Chemicals Upstream (Cracker) - ('000 tons) Paper - ('000 tons) Ethylene (subsidary) 800 800 800 1,700 1,700 1,700 1,700 1,700 1,700 Printing & Writing Paper 365 570 570 570 570 570 570 570 570

Propylene (subsidary) 400 400 400 1,200 1,200 1,200 1,200 1,200 1,200 Packaging Paper 1,660 1,660 1,880 1,880 1,880 1,880 1,956 2,306 2,306

Chandra Asri (30% stake) Box 550 637 692 741 795 855 1,013 1,013 1,013

Ethylene - - - - 600 600 600 600 860 - - - - - - - 43 43

Propylene - - - - 320 320 320 320 470 Flexible Packaging - - - - - - - 17 17

(Thai + Vietnam)

Chemicals Downstream - ('000 tons) Cement - (MT) HDPE (subsidiary) 520 520 520 920 920 920 920 920 920 Grey Cement (Camb, Indo) 23 24 24 24 24 24 24 24 27 PP (subsidiary) 320 320 320 720 720 720 720 720 720 White Cement (Thai, Viet) 0.2 0.2 0.2 0.2 0.2 0.4 0.4 0.4 0.4

PVC (90% stake in TPC) 858 828 766 886 886 886 886 886 886 Mortar 0.9 1.3 1.3 1.3 2.1 2.1 2.1 3.1 3.1

Chemicals Downstream (JV) - ('000 tons) Building Products - (M sqm) LLDPE (Dow JV) 300 300 300 650 650 650 650 650 650 Ceramic Tiles 95 122 122 122 149 149 225 225 225

Specialty Elastomers (Dow JV) - - - - 220 220 220 220 220 Ceramic Italian JV - - - - - - - - 5 Propylene Oxide (Dow JV) - - - - 390 390 390 390 390 Ceiling & Wall product 34 50 57 57 65 65 92 92 92

SSBR (BST JV) - - - - - - 50 50 100 Lightweight concrete 3 3 3 15 15 15 15 27 30.6- - - - - - - 15 15 Modular Home - - - 200 200 200 1,000 1,000 1,000

(Sekisui Heim JV)

MMA (Mitsubishi Rayon JV) 85 85 85 175 175 175 175 175 175

- - 20 20 20 20 20 20 20

HDPE / LLDPE (CAP JV) - - - - 336 336 336 336 336

PP (CAP JV) - - - - 480 480 480 480 480 SM (CAP JV) - - - - 340 340 340 340 340

Total CapacityCapacity at year end

Total CapacityCapacity at year end

Cast Sheets (Mitsubishi Rayon JV)

Machine Glazed Paper (Nippon Paper JV)

LLDPE cast sheet film (Mitsui Tohcello JV)

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SCG’s capacity rankings

Note: as of Dec/14

Thailand ASEAN

Downstream Chemicals 1 1

Packaging Paper 1 1

Cement 1 3

Ceramic tiles 1 1

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ASEAN’s consumption per capita

Plastic (PE+PP) Paper Cement

Note: 2014 data to be updated in mid-2015

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SCG’s cement plants in Thailand are strategically located:Domestic market share of approx 40%.

North:SCG 2 MT

Central:SCG 14 MTOthers 33 MT

South:SCG 7 MT

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Cement Balance: Thailand & Neighboring countries

Myanmar 2013 2018Supply 6 8

Demand 5 12

Myanmar 2013 2018Supply 6 8

Demand 5 12 Laos 2013 2018Supply 3 5

Demand 3 4

Laos 2013 2018Supply 3 5

Demand 3 4

Cambodia 2013 2018Supply 1 3

Demand 3 5

Cambodia 2013 2018Supply 1 3

Demand 3 5

Thailand 2013 2018Supply 56 60

Demand 40 50

Thailand 2013 2018Supply 56 60

Demand 40 50

2013 2018 GrowthCapacity 66 76 3%Demand 52 71 7%

Demand to Capacity 79% 93%

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Cement efficiency: Waste-heat power generators.

Phase 1 2,000 MB Thailand -started in Q1/08Phase 2 350 MB Cambodia -started in Q2/09Phase 3 3,400 MB Thailand -started in Q4/09

total 5,750 MB

Utilize heat from the production process to generate electricity.

…+ASEAN plants

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SCG Trading’s coverage:26 offices in 16 countries, with strategic ASEAN distribution, logistics and retail sales.

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Chemicals: ASEAN presence

Existing:

Existing StakeOlefins Capacity ('000 tons)

Ethylene Propylene TotalROC SCG 64% 800 400 1,200MOC SCG 67% 900 800 1,700Chandra SCG 30% 600 320 920

Existing total 3,820

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Typical crackersGas-based Naphtha-based

0

300

600

900

1200

'000 tons

‘000 tons

Chemicals: Types of crackers

0

300

600

900

1200

'000 tons

ethylenepropylene

‘000 tons

SCG’s 1st

cracker(1999)1.2 MT

Propylene-rich crackerNaphtha-based

SCG’s 2nd

cracker(2010)1.7 MT

0

300

600

900

1200

'000 tons

‘000 tons

by-products

ethylene

propyleneby-products

ethylene

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Thailand (recent investments) Machine glazed paper plant (mid-2014) start Upgrade facilities for dissolving grade pulp M&A of Tawana Container (61,000 tons). Greenfield packaging paper (400,000 tons) M&A of Dyna/Orient box plants (121,000 tons).

Philippines (2003)Packaging paper: UPPC

(245,000 tons)

Vietnam (2009) Box plants

Alcamax (53,000 tons) Others (47,000 tons)

Packaging paper (246,000 tons)

Singapore & Malaysia (2007)Box plants (55,000 tons)

SCG Paper Capacity:Packaging Chain:Packaging Paper 2,306,000 tonsBox Plants 1,013,000 tonsFibrous Chain:P&W Paper 570,000 tons

Short-fiber pulp 470,000 tons

Paper: ASEAN presence

Indonesia (2013)Box plants (37,000 tons)

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SCG: eco value productsThailand’s first eco label, accounting for 31% of SCG’s FY2014 sales, or 150,639 MB.

eco = ecology + economyThe balance of environment, society and economy towards sustainable growth

valueValue for stakeholders, society and environment received from innovative products and services

2010 2011 2012 2013% of total sales 13% 13% 14% 26%

201431%

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DJSI: Thai corporates

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Financials: SCG Cement-Building Materials

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Financials: SCG Cement-Building Materials

* EBITDA margin = EBITDA from Operations / Consolidated Sales

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Note: Domestic business: domestic sales from Thai operations Structural Products: Grey cement, RMC, Others (mortar, white cement, and lightweight concrete blocks).Housing Products: Roofing products, Board & Wood sub, and Home improvement.Ceramics: includes Sanitary ware and Fittings.

Financials: SCG Cement-Building Materials

Domestic Sales Segments

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Note: International business = ASEAN Operations, exports from Thailand, and Trading businessHousing - Roofing products, Board & Wood sub, and Home improvement.Ceramics - includes Sanitary ware and Fittings.Trading - are mainly trading of non-SCG products

Financials: SCG Cement-Building Materials

International Sales Segments

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Note: EBITDA = EBITDA from operations + dividend from associated companies

Financials: SCG Chemicals’ EBITDA

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Financials: SCG Chemicals’ profitability

*Note: SCG Chemicals (Sub + Asso.)

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Financials: SCG Paper

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Financials: EBITDA on Assets, and EBITDA Margin

EBITDA on Assets = EBITDA / Consolidated Assets EBITDA margin = EBITDA from Operations / Consolidated Sales

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Financials segmented

Sales & Assets:Sales (MB) 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Consolidated 120,353 128,201 148,865 192,395 218,265 258,175 267,737 293,230 238,664 301,323 368,579 407,601 434,251 487,545Cement 24,183 27,269 30,552 36,658 41,630 44,123 44,087 49,999 46,661 48,954 54,249 67,558

Building Materials 13,046 16,129 18,147 20,542 22,227 22,745 21,281 23,351 26,873 30,719 34,171 41,340 174,642 185,423

Distribution 53,326 52,191 56,551 68,558 76,070 81,519 86,440 102,672 86,641 96,898 111,920 126,690

Chemicals 38,152 42,394 50,767 75,185 86,084 122,645 130,223 136,527 101,115 144,317 192,929 203,539 209,997 248,118

Paper 26,995 29,305 33,564 38,265 40,306 42,645 43,890 47,110 42,729 51,714 54,839 57,430 59,135 64,614

Assets (MB) 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Consolidated 174,804 167,388 176,566 191,081 199,370 226,264 248,256 285,776 315,992 359,219 373,789 395,573 440,633 465,823

Cement 59,618 60,624 56,315 54,801 55,953 57,791 60,132 60,770 60,681 61,018 60,115 66,808

Building Materials 16,023 15,338 15,771 18,068 20,259 20,595 19,863 22,654 22,991 24,796 35,845 43,512 155,458 168,662

Distribution 7,813 6,864 6,631 7,765 8,560 10,610 11,143 10,903 10,110 12,177 16,234 24,463

Chemicals 54,284 57,762 67,254 75,186 78,656 109,391 123,205 138,504 165,964 165,087 176,036 176,837 192,063 183,884

Paper 25,844 28,720 32,813 39,128 38,575 40,734 46,454 51,089 47,942 50,127 52,463 58,439 65,169 73,987

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EBITDA & Profit for the Period (MB):

Segmented continued

EBITDA (MB) 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Consolidated 28,884 30,418 37,188 54,626 53,507 57,151 50,008 38,783 47,116 45,949 46,253 45,716 61,265 66,493

Cement 7,615 7,917 11,581 13,175 13,235 12,200 10,198 11,272 11,616 10,810 12,781 14,824

Building Materials 3,140 3,605 4,382 5,307 5,387 4,856 3,928 4,085 4,907 5,489 5,060 6,661 26,274 26,683

Distribution 1,268 1,214 602 1,541 1,546 1,498 1,576 1,739 1,581 1,440 1,532 1,564

Chemicals 6,443 6,452 9,851 23,642 19,653 26,199 22,611 12,598 19,482 16,024 14,394 8,628 20,342 26,142

Paper 8,205 9,536 9,819 9,840 9,496 9,634 7,943 6,660 7,901 9,129 8,811 8,844 9,473 9,718

Profit for the Period (MB) 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Consolidated 7,634 14,604 19,954 36,483 32,236 29,451 30,352 16,771 24,346 37,382 27,281 23,580 36,522 33,615

Cement 859 2,006 5,313 6,582 7,916 6,652 5,463 6,006 6,214 6,014 7,288 9,163

Building Materials 410 1,521 2,253 2,700 3,071 1,939 950 778 1,617 1,872 1,476 2,949 16,092 13,180

Distribution 680 586 251 968 1,079 1,021 939 1,211 1,077 1,061 1,075 1,035

Chemicals 2,611 5,285 7,777 20,523 16,656 17,574 16,982 6,136 12,556 22,609 11,190 2,690 11,292 12,461

Paper 3,272 4,079 4,424 4,122 3,689 3,574 2,353 1,658 2,286 3,490 3,331 3,560 3,587 3,448

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Thank You

For further details, please contact [email protected]