Industry conditions and competition 2019
The discussion of the economic condition in 2020, it would be inevitable that the COVID-19 has effect to the resulted in the lowest income in Thailand in 13 years. Thailand’s GDP for the whole year is expected to be decrease about -7.1% (figure forecast from the IMF). The domestic economy is in a recession, cause to the intense competition in the business and many of business close down. Including many of the company’s partners went out of business.
However at the beginning of the year, the government announced the country lock down. For the company’s outlets are classified as small shops which is not a shopping center, thus our business still can be continue operate during that time and we have increase in disease control closely by follow the recommendations of the Ministry of Public Health’s regulation. This is to make a confidence of all employees and customers. Accordingly, a customer who used to use a service of shopping center have turned to choose a company’s distribution channel. The negative effect from this epidemic situation, the company has also stop aggressive marketing effective from the government preventive measures.
In the second half of the year, the company has adjusted the marketing strategy to suit this epidemic situation while maintaining aggressive marketing standards. Use more on communication tools for customer tracking such as sending the advertisement through social media chat channels. This aim to finish sale without transporting to the outlet of customer. The result are extremely satisfy.
In terms of cost control policy in 2020, the company was able to reduce expenses by 8.1% due to measures of increasing the efficiency of employee’s ability of work in all levels. Monitoring and controlling costs in every work process. The benefit from “New Normal” working style is reduction in transportation expenses. Apart from the consideration in other contact channel, the route must be planned efficiency in every time before the driver leave from outlet.
In term of products, the company has developed new product to more penetrate the upper market. By producing large tiles size of 60X120, 80X80 and 30X50. The distribution channels still use company 201 outlets that can distribute products over country in a short time. For the selling price of this new products, mostly in the price range of 200-400 baht per square meter which can improve the company average price. Sales of these products are steadily increasing and the company still continue to develop other tiles sizes in 2021 to cover market’s need for all usability and all levels.
With the potential of the company distribution channels covering over the country along with the strategy that is consistent the market conditions and new products, it resulting to maintain a higher sales than last year. It also managed the highest rate of net profit as never before.
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.,
COTTO = 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 2021
In the year 2021, the company has set up a 3 major operating goals as follows:
1. Increase the proportion of sales The new size of floor tile is bigger which is size 60x120 cm. and 80x80 cm., continuing from year 2020 This is can compete with imported tiles from China at a cheaper price.
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 2020. 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. Develop work efficiency of employees at all levels continuing from year 2020 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.