Digital Form 56-1 One Report 2023

Throughout 2023, overall packaging demand in ASEAN, particularly in consumer-linked and daily consumption segments, sequentially recovered with support from the growing services and tourism sectors. Nonetheless, selling prices of packaging paper in ASEAN was under pressure, influenced by slow recovery of packaging paper demand in China in line with the country’s economy.

Meanwhile, global economy was facing with challenges from the contraction in purchasing power caused by heightened inflation and interest rates. Such circumstances also adversely effected ASEAN’s export sector, especially for export to Europe and the US which are major markets for electronics, textile, and footwear. Nevertheless, SCGP proactively responded to these macro challenges and continued to capture opportunity with prudent execution of strategies to pursue growth with quality while strengthen overall operations. The Company continually expanded into high growth potential businesses and markets with programmatic Merger & Partnership (M&P) and Organic Expansions, including in polymer packaging and corrugated containers, while also reinforced the Company’s supply chain.

M&P remained one of the essential approaches to strengthen SCGP’s position as the integrated packaging solutions provider. This could be observed through the transaction in Law Print & Packaging Management Limited, a prominent packaging solution provider in the United Kingdom, with aims to support rapid demand growth in pet food packaging. SCGP also invested in Bicappa Lab S.r.L, a medical supplies and labware manufacture in Italy, specializing in producing pipette tips, and M&P in Starprint Vietnam Joint Stock Company, a leading offset folding carton manufacturer in Vietnam that would enhance SCGP’s capability to meet the growing demand of both Vietnam and ASEAN consumer goods.

On Organic Expansions in 2023, SCGP’s projects in Thailand included the expansion of flexible packaging capacity to support an enlarging demand in pet food and health supplement markets and the expansion of corrugated container capacity, which contains the state-of-art manufacturing and printing technologies to cater to the evolving demand and lifestyle of clients and consumers. For overseas Organic Expansion, Peute Recycling B.V. (Peute) in the Netherlands has completed and commissioned its new facility which was relocated near to Rotterdam Port, resulting in a doubling of sourcing capacity of recovered paper and plastic while also improved transportation efficiency.

With the emphasis on continuous improvement from supply chain integration and operational excellence, SCGP makes use of the automation system to enhance production analysis, forecast and productivity. Data Analytics were adopted to strengthen end-to-end data visibility throughout the supply chain. This allows the customer to conveniently contact, order, track deliveries, and obtain rapid responses to enquiry while also enables SCGP to improve the efficiency of materials, inventory, and cost managements. Moreover, the Company has been utilizing Artificial Intelligence (AI) and Machine Learning for data processing functions; for example, generative AI that was used for AI Printing Inspection System to assure printing quality, minimize production wastes and reduce time spent on manual visual inspection. SCGP also continuously pursues improvement in energy consumption and technology. One of the key efforts is via the incremental usage of biomass, which promotes conversion of waste into renewable energy while enables efficient utilization of national resources. All abovementioned operational achievements were made possible by the commitments from all SCGP’s employees in delivering values to customers and consumers.

Moreover, SCGP continually strives to develop packaging innovations and solutions in order to fulfill customers’ and consumers’ requirements. One of the examples is the collaboration with Origin Materials, the US, to develop “Bio-based Plastic from Eucalyptus Woodchips” to capture emerging growth in renewable materials. The development of cutleries and food trays made from eucalyptus wood in respond to the surging demand of sustainable food packaging which can be recyclable and compostable.

SCGP is committed to operate its businesses in line with a distinguished ESG framework to achieve sustainable growth. In 2023, SCGP effectively reduced its greenhouse gas emissions, surpassing the annual target set for Science-Based Target initiative (SBTi), under the strategic direction toward low-carbon society and Net Zero by 2050. Concurrently, active engagement with all stakeholders are core to SCGP’s operation. On December 8, 2023, SCGP obtained a total score of 85, calculated as Top 1% in in the Dow Jones Sustainability Index (DJSI) for the Containers & Packaging Industry by S&P Global. In addition, the Company achieved AAA sustainable stock rating from the SET ESG Rating and received 2 SET Awards from the Stock Exchange of Thailand, including the Best Innovative Company Awards and the Best Sustainability Awards, for the second consecutive year. SCGP’s excellence was also recognized with 3 quality awards from IAA Awards for Listed Companies 2022 arranged by the Investment Analysts Association (IAA), comprising of Outstanding CEO, Outstanding CFO, and Outstanding Investor Relations under category of industrial products, with the votes from analysts in SET and IAA members.

With commitment in sustainable and quality growth, SCGP recorded total revenue from sales of Baht 129,398 million in 2023, marking a decrease of 11% year-on-year. Profit for the period was Baht 5,248 million, a decrease of 10% compared to the previous year. The Board of Directors resolved to propose that the 2024 Annual General Meeting of Shareholders approve the 2023 dividend of Baht 0.55 per share, totaling Baht 2,361 million, representing 45% of the profit for the year of the consolidated financial statements in accordance with the dividend policy. In this, there was an interim dividend of Baht 0.25 per share with a final dividend of Baht 0.30 per share.

Heading toward 2024, SCGP aims to continue the execution of value accretive Merger & Partnership and Organic Expansions to meet customer’ and consumers’ needs in high potential markets in ASEAN and beyond with target segments that include lifestyle consumer goods, food & beverages, healthcare and medical products. Meanwhile, strategies to improve SCGP’s competitiveness include continuous development of new packaging innovations through Research & Development, the strengthen of long-term raw material security, relentless efforts to pursue operational excellence, systematic employee’s development plan with focuses on knowledge, capabilities, and skills required for ESG focused business growth.

On this occasion, the Board of Directors would like to express our gratitude to shareholders, debenture holders, business partners, suppliers, customers, employees, domestic and international financial institutes, and other relevant parties for your trust and support. Furthermore, SCGP would like to assure that the Company will effectively and efficiently conduct our businesses under the distinguished Corporate Governance. Adhering to the principles of ESG, the Company will strive to become the leading international organization dedicated to driving its own businesses, and to offering value to society and contributing to a better and sustainable world.