Fit to be Thai’d

Sofas made of paper? What about conference tables and chairs — perhaps a whole corporate setting — clothed in paper and carton? Carton coffins, anyone?

Thai company Siam Cement Group (SCG) is making heads turn thanks to its innovative leaders, whose hara-kiri approach to business has resulted in unprecedented growth.

When I received an invitation to join a familiarization tour of SCG in Thailand a couple of weeks back, I wasn’t really thinking of anything more extraordinary than the Grand Palace or cruising the Chao Phraya River.

There wasn’t really anything to see inside a vast corporate building, was there? But SCG has a lot more to offer aside from its respected business name.

SCG’s long and colorful story begins with a multi-million conglomerate commissioned by the King to help in the development of their country. The company has since diversified and now is aggressively campaigning in the international market. SCG wrapped it all up in one tiny package for the Philippine media to see.

The company was established in 1913 following a Royal Decree by his Majesty King Rama VI to produce cement, the main building material for infrastructure projects that contributed to the country’s progress. Since then the group has diversified to five core businesses focused on chemicals, paper, cement, building materials and distribution.

Today SCG has positioned itself in the ASEAN region and some parts of the Middle East and Asia as among the top players in the industry. Cambodia, Vietnam and the Philippines are among the developing countries on the ASEAN rim of influence in which SCG has been aggressively expanding.

The success of SCG can be attributed to the way it conducts its business, which is in accordance with corporate governance and sustainable development. The group encourages innovation in products, services, work process and business models to create higher value for its customers.

After a short rest at Pathumwan Hotel, we were called to join SCG’s top honchos for dinner on a Chao Phraya River cruise. The river, which was Thailand’s center of commerce in the past, is now one of Bangkok’s must-see attractions.

In between the dinner and the cultural presentation, SCG’s top brass briefed us on the company’s status vis-à-vis its projected expansion in the Philippines.

Actually, SCG already planted itself firmly in the Philippine market when it took over United Pulp and Paper Co. Inc. (UPPC) from Phinma Inc. in 1993. UPPC is the Philippine’s largest producer of packaging paper and corrugated medium used in carton packaging products. Today, UPPC is a P4.32-billion industry, and is still pounding the market with reckless abandon.

Another SCG business interest in the Philippines is Mariwasa Siam Ceramics Inc, which has a P0.5-billion scale of investment, and is the sister company of Cotto Tiles, Thailand’s leading ceramic company. MSC Inc. is the Philippines’ largest ceramic tiles manufacturer and distributor of high-quality concrete roof tiles, fittings and accessories.

SCG also manages SCT (Philippines) Inc., the company that supplies energy, industrial supplies and recycling products.

The following day we were treated to lunch with SCG’s Paper Division president Chaovalit Ekabut at the company’s century-old guesthouse located in central Bang Sue.

Ekabut is young at 49, and is a new-generation executive with vast experience in business management and administration. He joined SCG in 1982 and is partly responsible for putting a strategic emphasis on the Total Quality Management Plan that brought the company to greater heights.

The amiable executive showed us the innovative products their paper division has concocted, like chairs, sofas, conference settings and various designs — all made of paper.

“SCG has pursued a business direction to expand investment in the ASEAN, and particularly the Philippines, because we want to be a sustainable business leader in the region. I think the Philippines is a good place to invest because we already saw the country’s potential to become a key market a decade ago. We are looking further to investment opportunities in the future depending on current growth and demand,” Ekabut said.

“The expansion in the Philippines will give us the opportunity to become one of the business leaders in Asia as well as open up doors of opportunities to Filipinos,” Chaovalit added, while emphasizing that the Philippines is now on the brink of economic takeoff because of its innate talent for survival and our ability to speak English.

But Chaovalit said that investing in the Philippines is not without its downside: “The Philippines must have an efficient transportation system to really make the bold move. The cost of sending both raw materials and finished products to Manila and any part of the country is very expensive. Shipping costs are too high,” he said.

“I think your government can be a better partner in the near future,” added Chaovalit, who also emphasized that they are not getting any preferential treatment from the Arroyo administration.

With a total of P10 billion in assets, SCG’s businesses in the Philippines generated P7.5 billion in total revenue in 2006.

Under it’s “Go Regional” expansion strategy, SCG has expanded investments to many countries in ASEAN including paper, building-material and chemical projects in Vietnam, cement and building-material projects in Cambodia, chemical and cement projects in Indonesia, corrugated boxes and building materials in Malaysia and Singapore, and paper building materials in the Philippines.

“Ultimately, our goal is to go big in the Philippines so we can also give inspiration, not only business,” Chaovalit said.

Asked whether the often-shaky political situation in the country could somehow affect their initiatives to bring in their products, Chaovalit said, “There is politics everywhere. Even in our country we have political problems right now, but what is good in your country is that you are gaining ground. Your GDP is actually one of the highest in the region,” he said.

The latest economic indicators have placed the Philippines third in the region with a 6.6 growth rate, running closely behind Cambodia, which boasts a 9.2 GDP growth percentage; and Vietnam, with a 8.3 GDP growth percentage.

Thailand, considered one of the region’s economic powers, is tugging on the Philippines’ coattails with a GDP growth rate of 4.0.

“Things are looking bright for the Philippines and that is our focus now,” Chaovalit said.

That night we were brought to a place 50 kilometers south of Bangkok for a great dinner and a Thai cultural show entitled Siam Narimitre.

On the third day we drove to the countryside to visit the Wangsala Complex, the company’s main industrial lifeline in Thailand. Here, various designs of ceramics and tiles were presented to the Filipino delegates. In their display window, I thought I saw the same bathtub as the one in my hotel room.

We checked out of our hotel early on our last day, and trooped to the Grand Palace, the King’s official residence. The gold-laden structures (more than 10 of them) displayed the grandeur and the wealth of Thailand’s monarchy. I was amazed see to how such splendor survived the bombing of the allied forces in 1945. Those temples are made of pure, 18-carat gold leaf.

After an hour, we drove to Suvarnabuhm to take the next flight home to Manila.

Back in Manila, I checked to see if my paper chair was still among my baggage, and it was there.