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SCG staff are the most valued asset and the key driving force for the group’s success throughout its 100 years
SCG gradually diversified into many businesses. Then, following its recent restructuring in 2013, it has focused on cement-building materials, paper and chemicals. SCG is a strongly expanding regional corporation, with 200 companies and more than 43,000 employees across ASEAN today. SCG’s president and CEO Kan Trakulhoon outlined part of the group’s history and vision to VIR’s Tuong Thuy.
SCG already has a century of development and has achieved some notable advances. Are you satisfied with these accomplishments, and which ones do you see as the most impressive? What factors have helped SCG achieve such success?
Our vision is to become an ASEAN sustainable business leader. To achieve that, we have employed two key strategies – expansion into the region and development of high value-added products, while building a better quality of life and a sustainable society as part of our sustainable development framework.
Our ASEAN network has grown continuously with combined assets totalling $2.068 billion in Vietnam, Indonesia, the Philippines, Laos, Cambodia, Singapore, Malaysia and Myanmar. We will continue the expansion of our investment in our core businesses.
In terms of innovation, we plan to move ahead with the development of high value-added products in accordance with our vision. In 2012, SCG spent VND953 billion, or $46 million, on research and development with high value- added products accounting for 34 per cent of last year’s total sales volume. This year we have allocated a budget of VND1.433 trillion ($70 million) for research and development in order to further develop our value-added products and services. We are confident that we are pursuing the correct path and have been blessed with success.
The driving force behind this stable growth has been our workforce, or ‘SCG People’, which are our most valuable resources. We have made big efforts in the promotion and development of human resources both in knowledge, ability and morality to ensure that SCG staff can perform their jobs in all circumstances and we will continue to invest in this.
You have set a goal of transforming SCG into a leading global company in the context of the ASEAN Economic Community (AEC) coming into existence by 2015. How much of this strategy has SCG completed?
We all know that by 2015, the establishment of the AEC will dramatically affect the business community, as investment will be able to freely flow among ASEAN countries, including human resources. SCG along with many regional and global companies will face competition to attract the best talents to serve this expansion in opportunities.
For SCG, we have prepared for this scenario since 2007 when we decided to go regional in line with our vision to become an ASEAN sustainable business leader with an innovative workplace of choice, a model of sustainable development and corporate governance in ASEAN. This year is an important milestone for SCG. It marks our 100th anniversary and lots of changes in our internal structure to strengthen our human resources strategy and workforce.
To prepare SCG staff for the AEC, we have put efforts in, starting from our recruitment process by increasing our source of applicants and persuading them to work with us. We have also created a mobility profile and have used it as a framework to develop employee knowledge and competencies which are suitable for each country, such as cross-cultural management and communications, managerial skills, adaptability, networking and inter-personal skills, as well as international business.
SCG has designed a curriculum to prepare employees to work abroad, creating a global mindset, including understanding about languages and culture. We have also developed vocational and theoretical skills courses for SCG staff in all countries in which we operate to consistently enhance their competencies. This year we also initiated an international internship programme recruiting university students to experience working at SCG in Thailand.
What is the role for the Vietnamese market in your development strategy? Compared with the other markets in which SCG operates, what’s particularly attractive about the Vietnamese market?
SCG has always regarded Vietnam as a very important market. Since our establishment in Vietnam in 1992, we have witnessed tremendous growth and changes in the business landscape as well as socio-political aspects. Right now, with an emerging economy, large, young and dynamic population, favourable business environment, and the upcoming AEC, Vietnam definitely has advantages that inspire our continued commitment to it as one of our strategic markets.
SCG is currently doing quite well in Vietnam, with 19 operations and more than $615 million in total assets and a workforce of 6,500 local employees. In the first half of this year, our revenue from Vietnamese sales reached VND4.899 trillion ($230 million), a 43 per cent growth year on year from the consolidation of Prime Group.
In terms of the Vietnamese market, which core business is your top priority in this market, and which brings the biggest profits?
We operate in all three areas and we consider all equally important. Our latest Vietnam investment was the $240 million acquisition of Prime Group. Prime Group is the fifth largest tile manufacturer in the world and a leading building material maker in Vietnam with a 20 per cent market share, strong distribution network, solid business structure and management and operational strategy.
Acquiring Prime Group not only strongly enhanced our presence in Vietnam’s building materials market, but has also seen us become the world’s largest ceramic tile producer, with the top production capacity of 225 million ceramic square metres a year, a move that enhanced our capabilities and opportunities within ASEAN, and supported our vision of becoming a regional leading corporation.
SCG already has a 100-year history. What is your vision and goals for SCG in the next 30-50 years and even 100 years from now? What are the ways to achieve those goals?
SCG will continue to do business under the principles of sustainable development based on the three pillars, of economics, society and the environment, in order to enhance the quality of life for all. We consider this as the key factor to sustain the business in the future.