Industry conditions and competition 2019
In 2019, Thailand faced the problems affecting the economy in many ways caused Thailand's GDP to fall at the low level of 2.4% and expected to decrease again in 2020 by 1.5%-2.5%. The impact on Thai economy is inescapable about trade war of the economic powers between the United States and China. The impact of political instability that makes investors lack confidence in supporting the government's economic policy and slowdown of new housing construction projects due to LTV measure which directlyt affect the real estate and construction materials. Also the impact from natural disasters that Thailand has suffered from both floods and droughts. It resulting in significantly less agricultural products.
For the competition in construction materials and equipment imports from China continue to increase and there are importers who bring more products from India. This is cause to the price of similar constriction materials produced in country must be maintain or drop.
In the first half of year 2019 in term of sales, the company has proactive marketing with mainly focus on repair group which is suit-able to the potential of the company that has selling points around country. It make the branches operation can reach all customer around country and customers more convenience to shop. The company still be able to increase market share in the first half year sales grew by 3.7% in value and 1.4% in volume. Since the company mainly sell ceramic tiles products, there are strengths in the pattern difference from imported products. It can be easily bought and have a reasonable price. Also the company has push large size of tiles that have more profit margins and have more price value, cause to the average price increase by 2.6% in terms of production. The company is able to produce more than 6.5% from last year, resulting in lower production costs by the economy of scale.
In the second half of 2019, the economic situation deteriorated because of drought in many provinces. It cause to less of agricultural products. The population in urban area lack of income for repair household. So that the company change the marketing area for all branches for more marketing in the city. Resulting the company could hold sales volumes by dropped only 0.3% from the previous year. Due to the intensify competition within country from imported products which cause to the average price decrease by 3% from the previous year.
The potential of the company's sales channels that cover over the country, combine with strategy that is in the line with market conditions. So that the company is able to maintain sales increase than previous year by 1.1%. Also management net profit margin to be stable.
Sales classify by floor and wall tiles business in the ceramic group in 3 years (million baht)
%Market Share classify by floor and wall tiles business in the ceramic group on the past 3
Source : Annual performance data from the Stock Exchange of Thailand
DCC = Dynasty Ceramic Public Co.Ltd. ,TGCI = Thai—German Ceramic Industry Public Co.Ltd. ,UMI = The Union Mosaic Industry Public Co. Ltd.,
C070 = SCG Ceramic Public Co.Ltd. (Consitsts of 1.Thai Ceramic Co.Ltd. 2. Gemago Co.Ltd 3.The Siam Ceramic Group Industries Company Limited 4. Sosuco and Group (2008) Co.Ltd. and 5.Thai—German Ceramic Industry Public Limited: SCG Ceramic Public Co.Ltd. "Company' set up by a business combination through merger which is a business integration of produce and distribute ceramic tiles in Thailand under 5 company group in The Siam Cement Public Co.Ltd., to create an appropriate organization structure and increase the efficiency of cooperation in each company. As well as supporting the expansion of ceramic business both domestically and internationally. The company registered as a juristic person in Thailand and approved as a listed security in the Stock Exchange of Thailand on August 1, 2019 (date of merger).
Work plans and strategies in 2020
In the year 2020, the company has set up a 4 major operating goals as follows:
1. Increase the proportion of sales and the average selling price from the new products.
1.1 The new size of floor tile is bigger which is size 60x120 cm. This is can compete with imported tiles from China at a cheaper price.
1.2 The wall tile size 30x50 cm has introduced to the market at the end of 2019. This is the wall tile that is bigger than the currently wall tile size sell in the market, adhere to the market data analysis that has need to use larger size of tile and more popular on both in project work section and a new generation customer group.
1.3 Anti-Slip floor tiles or non-slip tiles in size 40x40 cm and 60x60 cm, a new product manufactured from the research and development for ceramic tiles with unique characteristics which has non-slip surface than general glazed tiles even in wet areas, washing areas, or living areas for elder to be safer alternative for use.
1.4 RCI GLASS MOSAIC size 30x30 cm is the newest product that emphasized the distinctive features of glass mosaic. There are both elegance and luxurious decoration types (RCI MOSAIC) and RCI POOL MOSAIC by arrange showcase to show the sample of room decorate in various styles at sales point in branches.
2 Reduce the investment budget no additional investment in creating a new branch due to the economic slowdown. Focusing on the development of branches that are currently under construction, continuing from year 2019. Increase the rental area customer to become the center of customer service. The image enhancement plan is therefore one of the important plan by improve the environment of branches. Adjust the space to be comfortable and open with broadly parking space, modern to attract customers who come to use service. Including install air conditioning in some branches to make the customer who come to use service can spend more time to shopping and more convenient.
3. Reduce cost and expense of overall organization by 10% with the cooperation of all departments to try to get a better performance.
4. Develop work efficiency of employees at all levels support learning opportunities, develop employees at all levels to be good and smart. Encourage them to be ready for continuous learning as well as building skills including learning new knowledge to keep up with changing of business trends. The company providing training for employees at all levels since the employee joined the company. Primary will receive orientation training for new employees to gain knowledge and understanding about the company, organizational culture and basic information to work. Acknowledge in regulations for coexistence so that the new employees can adjust to working conditions which are benefit to the performance of overall organization.