• 
• 

Published on September 24, 2007

SCG Distribution Business is working hard to achieve sales of Bt52 billion at its SCG Home Mart building-supplies chain this year, as the economic slowdown has taken a heavy toll on all domestically oriented businesses - regardless of size.

Kajohndet Sangsuban, president of the Siam Cement Group unit, said last week that the whole construction-materials market had contracted 4-5 per cent in the first six months, with cement sales declining 8 per cent, tiles 10 per cent, ceramics and sanitary-ware 8 per cent and wire rods 8 per cent.

Property sales could drop by more than 10 per cent from last year. According to the Agency for Real Estate Affairs, developers suspended the launches of up to 110 projects valued at Bt55 billion in the first half due to the sharp increase in inventory. Custom-built homes are also expected to slip 25 per cent.

Earlier, HomePro revised its 2007 sales-growth target from 20 per cent down to 15 per cent, or Bt18.12 billion to Bt17.3 billion, matching the drop in consumer spending.

Home Mart generated Bt37 billion in sales in the first three quarters of the year but needs to do better than that - Bt15 billion - in the final quarter to hit its sales target.

Its strategy for ensuring the target gets met, as well as for maintaining strong customer awareness in the long run, is applying the "total home solution" concept to its Home Mart Max stores, which is one of its two platforms, and continuing to expand its nationwide branch network.

It has 300 branches - 221 Home Mart Builders and 79 Home Marts.

"Total home solution" covers services from product and design consulting to installing products at customers' homes, starting with roofing, ceiling and bathroom systems. Services will be gradually added for other parts of residences.

The Home Mart Max in Nakhon Sawan was the first to apply the concept. An outlet in Bangkok will be the second to do so this year.

Within five years, 70 branches nationwide will be selling total home solutions at a cost per branch of Bt100 million, depending on the size, ranging from 3,000-6,000 square metres.

SCG will chip in Bt30 million per branch for operating systems, while its dealers will take responsibility for renovating buildings and rearranging displays. SCG also dispatches staff to all branches.

SCG runs the Nai Chang Dee (contractor) Academy as its construction professional training institute. Home Mart has partnered with SCG Cement and SCG Building Materials to provide a network of builders and contractors for its stores.

It sponsors the Dual Vocational Training Project, a collaboration of Home Mart and the Vocational Education Council, that aims to produce quality personnel for Home Marts throughout the country. Scholarships are awarded to students who intend to earn a vocational certificate.

Kajohnsak said consumer behaviour would gradually change. They used to buy products from the company's stores and then had trouble installing them at home, which often left a bad impression of the company. With the new service, training project and academy, Home Mart could provide expert advice from the beginning to the end.

He said it was difficult to identify how much sales could be increased, but the company expects SCG Home Mart to rise to the top of customers' minds.

He sees the building-materials market recovering next year with an elected government in power and construction starting on mega-infrastructure projects, including Skytrain extensions. Interest rates are also trending down. The three factors could boost consumer as well as investor confidence, he said.

All Home Marts will carry a redesigned logo with SCG's elephant in red tile within three years to make people aware that they are part of SCG, he added.

Besides Home Mart, SCG Distribution is involved in international trading and logistics.

Nitida Asawanipont

 The Nation