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Thailand

SCG banking on revenue growth from ventures overseas

SCG Logistics expects revenue in 2019 from overseas markets to grow by 30% as the company focuses on ventures in China, Indonesia and Vietnam.

Managing director Paitoon Jiranantarat said the three countries are high-potential markets and SCG is providing business-to-business logistics service in those markets.

Moreover, the lifestyle of the younger generations has changed to a preference for buying goods and products through e-commerce channels, so this trend is boosting the flow of logistics in many countries.

"SCG is seeking new business partners with local companies in those three countries, while local companies have to adopt the logistics technology and innovation to support SCG operations in their markets," Mr Paitoon said.

He said Indonesia is the largest e-commerce market in Southeast Asia and bigger than Thailand by roughly three times.

Vietnam is the latest market with rapid growth, while China has many business opportunities for SCG.

SCG Logistics, a subsidiary company of SCG Cement-Building Materials, expects revenue this year to grow by 12% to 22 billion baht.

Domestic revenue is expected to account for 70% of the total revenue in 2019.

In addition, SCG has set aside a budget of 800 million baht for 2019-24.

SCG will spend some 200 million baht of the allocated budget during this year.

"Most of the budget will be invested in the digital platform and technology to serve the e-commerce market," Mr Paitoon said.

Moreover, SCG Logistics is in talks with new business partners from Japan on logistics opportunities, expecting to reach a conclusion soon.

Mr Paitoon said SCG aims to become the one-stop logistics solution for small and medium-sized enterprises (SMEs), so it has teamed up with a startup company, MyCloud Fulfillment, for new cooperation in digital technologies to deliver insight analysis.

"The SME e-commerce market grew 12% in 2018 from the year before, so this partnership will support all stages of SME activities such as inventory management, packing and shipping," he said. "As a result, fiercer competition has extended into the horizon of the fulfilment arena while SME companies are making their best efforts to thrive."

SCG Logistics forecasts the revenue of fulfilment business in 2019 to reach 100 million baht and expects to reach 1 billion baht by 2024.

Nithi Satchatippavarn, managing director of MyCloud Fulfillment, said the collaboration with SCG Logistics will arm the MyCloud startup with business consultations that help accelerate advancement.

"The two companies will provide stock allocation and demand forecast, while customers can leverage in-depth data for better business planning in the production process, cost management, sales and communications," Mr Nithi said.

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