SCG Vietnam Aims to Achieve Circular Economic Sustainability

2:51:43 PM | 19/4/2021

That was shared by Mr. Dhep Vongvanich, Country Executive Director-Vietnam of SCG. According to him, SCG always considers social responsibility as part of its business philosophy.

Sharing about the company's intentions when investing in Vietnam, Mr. Dhep Vongvanich said SCG believes in Vietnam's potential as a promising destination for investment with a young population, a vibrant market and untapped opportunities.

How does SCG view investing in Vietnam?

SCG set the footprints in Vietnam since 1992, expanding from the initial trading business to the concurrent manufacturing and distribution services in Cement-Building Materials, Packaging and Chemicals.  Since then, our investment policy has always focused on sustainability and social responsibility.

SCG’s investments aim to work together with partners to grow stronger together, therefore enhancing our ASEAN competitiveness against other economies in the world.

In the years to come, SCG will continue with this direction, to promote national economic and social welfare, increase export income, create employments and develop local human resources.

What are the ways SCG has invested in Vietnam?

The investment method is determined by various factors and dependent on investment opportunities. Recently, besides our greenfield project Long Son Petrochemical Complex, SCG has adopted M&P (Merger & Partnership) approach to some businesses such as packaging.

SCG intends to grow business together with our local partners by exchanging know-how, transferring technologies, upgrading local brand reputations, developing human capital and committing to sustainability.

Take an example of the ceramics business, SCG has expanded its production base in Vietnam through our partner Prime Group. By combining SCG’s expertise and experience in ceramic tile industry and the local partner’s resources, we can create “made-in-Vietnam” high-quality products that can be exported to other countries including Thailand.

During COVID-19 outbreak in the country, SCG’s subsidiaries have joined hands to donate cash, commodities and innovations to different localities in Vietnam to fight the pandemic.

Until now, SCG’s investment in Vietnam has amounted to US$4.8 billion. We are now employing 10,800 local staff and our plan is to grow our Vietnamese staff in the long run.

Why is SCG adopting a majority equity approach?

The shareholding ratio is subject to negotiations with the partner base on the areas of strength. In any circumstances, as partners, we respect each others’ inputs work together to make decision that best benefits the enterprises.

However, since the development of high-value products will require additional investments and highly experienced management to make decisions, SCG will aim for majority acquisition to best transfer our advantages in technology, global connection, innovation and management to Vietnam.

As said, follow SCG’s core value of Adherence to Fairness, we must always honor our joint venture partners. Especially in important matters, SCG will give shareholders, despite being minority, the right to contradict and approve. This is the Fairness that SCG has always performed.

Long Son Petrochemicals Complex is under construction and will be put into operation soon in 2023. How does this project affect the SCG’s total operation in Vietnam?

Long Son Petrochemical Complex located in Ba Ria Vung Tau province is one of the most important projects for Vietnam’s petrochemical industry, with the total investment of more than US$5 billion. In 2018, Vietnam’s government cabinet had graciously joined the kick-off event of the project, and stressed the importance of this investment to the national economy.

Once completed, LSP will result in a larger SCG business operation in Vietnam and result in the economic growth of Vietnam as well. It will attract more downstream businesses to invest in the country. With world-class technology and experiences in petrochemicals industry, LSP will provide high-quality products with competitive price and will also help reduce import volume of plastic resin, leading to a better competitiveness of downstream producers. In addition, the project will bring more employment opportunities for Vietnam both directly and indirectly through supporting industries.

Long Son Petrochemicals is the flagship petrochemical project and is a driver of the national economy

It is said that SCG is planning to take over the whole supply chain of the plastic industry including the upstream activities and downstream activities. Can you share your views on this issue?

SCG has no goal to take over the whole supply chain of the plastic industry. SCG together with local partners will enhance competitiveness and upgrade product quality to attract foreign Direct Investment (FDI) from multinational corporations (MNC) to Vietnam about high-quality packaging as a crucial part of the supply chain.

Moreover, with sustainability at the core of our business practices, SCG will bring the best innovations and technologies to ensure that our production and products are environmentally friendly.

SCG is well-known for its sustainable development and circular economy practices. How have SD principles and practices been applied in Vietnam so far? Can you share some examples of such initiatives?

SCG’s philosophy of conducting business in every country is to concern with social responsibility. We aim to sustainably improve the well-being of our stakeholders.

In Vietnam, SCG focuses on the 03 key areas: youth development, health promotion, and community and environment development. Our flagship project Sharing the Dream Scholarship has continued for over 13 years, funded more than 5,000 students of all levels. Our sports programs encourage young people to become professional soccer players and make good use of their free time. Our proactive innovation and donation to timely assist local governments to prevent the spread of COVID-19 and help the victims of natural disasters have contributed to a better life quality to many Vietnamese people.

In the condition of the world facing escalating environmental, SCG has initiated several activities to disseminate the concept of Circular Economy and create a network of cooperation from all sectors. Examples include raising awareness and behavior among employees; collaborating with Ministry of Natural Resources and Environment (MONRE), Dow Chemical Vietnam, and Unilever Vietnam International in managing the problem of plastic waste; developing prototype of zero-waste school and preparing to be expanded to other schools; in addition, coordinating with MONRE, to prepare a symposium to educate circular economy in order to create more action.

For circular economy solutions, SCG has started the production of post-consumer recycled resins utilizing used plastics from community waste and constructed chemical recycling demonstration plants

Following our enterprise strategy of ESG (Environmental, Social, Governance), SCG’s operations in Vietnam have gone to the forefront to practice best environment standards including wastewater treatment facilities, waste heat generators, solar panels installation, to not only comply with the local government’s regulations but go beyond to lead a sustainable future and be a role model for other businesses.

R-1 which is a flexible packaging that comprises multiple layers to offer unique properties of high-impact resistance, content protection, recyclability and friendly with the environment.

By Van Luong, Vietnam Business Forum