In 2019, it was a year of global economic slowdown. The US-China conflict has imposed threatening on trade barriers. Manufacture and export sectors along with various industrial supply chains have suffered from higher tariffs barrier. In turn, the Brexit settlement is still ongoing, and the Middle East situation remains disputed. With these worldwide circumstances, all businesses still face with global uncertainty. Similarly, Thailand economy is in a synchronized slowdown. Thai baht appreciation has weakened the country’s export as well as the severe drought conditions also pull down the growth in industrial and agricultural sectors. Moreover, in early 2020, the outbreak situation of Covid-19, which was uncontrollable, has worsen worldwide economy, leading to the recession.
The Board of Directors recognized several issues, affecting overall EPG business operations. With their surveillance, we have implemented “The New S-Curve” strategy to develop innovative products and utilize manufacturing technology for two years. We have introduced several innovative products to the market for achieving EPG New S-Curve. While the Covid-19 situations still remain, the Board of Directors have assigned the management team to intensively perform “USE” policy, which proved the success during the 1997 financial crisis, from February 2020 onwards (USE refers to; U: Utilization, S: Save and E: Efficiency). By doing so, the company can save more costs and optimize the resource utilization for higher efficiency.
EPG business performance in 2019/2020 for year ended 31 March 2020 achieved the total sales revenue at 10,217.4 million baht, decrease by 3.4% with the net profit of 999.3 million baht, increased by 10.6% from last year. The continued growth came from cooling/heating insulation business, both from domestic and international markets such as USA, Japan, and ASEAN, especially in premium products. Our plastic and packaging business also achieved fair growth, particularly in food packaging, despite of slower increase in the domestic consumption. However, there was a sale drop in automotive parts and accessories business, as a result of global slowdown in automotive market.
Based on EPG operational result, the Board of Directors approved an interim dividend payment for the first half year of 2019/2020 at the rate of 0.10 baht per share, or 280 million baht in total. The entire amount was paid on 12 December 2019. In this regards, there was a proposal for 2019/2020 AGM for additional dividend payment approval at the rate of 0.12 baht per share, amounted to 336 million baht. Therefore, overall dividend payment for this year is 616 million baht with the payout ratio of 61.6%
Our business success is to be the world class innovative leader and the global manufacturer and distributor for sustainable growth.
Creative Innovation Organization
EPG has highlighted the innovation as a key to business sustainable growth and resilience, apart from continuous R&D improvement. Last year, EPP began to manufacture and distribute bioplastics products to the market, using the existing real-time responsive technologies and machines while Aeroklas developed innovative products in response to the market demands on EV automotive parts and accessories, which required light-weighed, durable and highly flexible products.
In addition, EPG is aware growing concern of plastic waste management, thus Eastern Polypack has been contributing in plastic waste reduction by designing the products to suit with the usage, and preparing production technology to support the bio-plastics material which can be used in producing the product without the investment in new machine.
Our production bases are located in every continent with several distribution channels in more than 100 countries. The supply chain management remains crucial for our business operation. We have operated worldwide sourcing to minimize risks on raw materials shortage and well selected reliable partners with reasonable price. Moreover, our manufacture and logistics management also play important role in our business performance. In case of Aeroflex, we domestically produce semi-finished products and ship to US market for further process. We have managed our inventory and logistics and guaranteed the delivery within 48 days after the order from our warehouses in US nationwide.
To create Sustainable Growth
EPG growth adheres to our corporate vision on creative innovation organization for higher quality of products, which are beneficial for society and improve community livelihoods.
On behalf of the Board of Directors, we would like to express our sincere gratitude toward all employees, business partners, customers, shareholders, and relevant parties for your ongoing support and faithful trust. We are committed to achieve our business growth in compliance with good governance and sustainability with the balance of all stakeholders.
Mr. Vachara Tuntariyanond
(Chairman of the Board Officer)
Mr. Pawat Vitoorapakorn