To All Shareholders,
TPI Polene Creating the Future for Sustainable Growth
In 2024, Thailand's industrial sector faced significant challenges stemming from a sluggish economic recovery, high level of household debt burden, and persistently high interest rates. Small and medium-sized enterprises (SMEs) have been particularly vulnerable to liquidity risks, as financial institutions exercised increased caution in extending credit, especially to households with high debt burdens. The influx of competitively priced products from China, coupled with uncertainties surrounding economic, trade, and taxation policies in major economies, as well as ongoing political instability and geopolitical tensions across various regions, have continued to undermine business and consumer confidence. As a result, the cement and construction materials industry has remained relatively stagnant, with limited growth momentum during the period.
During the period, the Company placed strong emphasis on optimizing production efficiency and reducing operating costs by decreasing coal usage as an energy source and transitioning to clean fuels to mitigate the impact of stricter environmental trade regulations, particularly the European Union’s CBAM (Carbon Border Adjustment Mechanism), which will serve as a trade barrier affecting the Thai cement industry. This situation has driven the cement industry toward a significant transition to clean and renewable energy.
Environmentally Friendly Investment Projects Aiming for Low-Carbon Production
The Board of Directors recognizes the importance of adapting to these changes and has demonstrated its vision and commitment to leading this transformation. The approach emphasizes environmental and social responsibility alongside the pursuit of sustainable business returns. This is achieved by promoting activities aligned with the Sustainable Development Goals (SDGs). The Board has set a long-term goal for the TPI Polene Group to achieve carbon neutrality by 2043, focusing on low-carbon production, developing new innovations, and increasing the use of renewable and clean energy in the production process to reduce greenhouse gas emissions in a tangible way. The Company actively promotes initiatives aligned with the Sustainable Development Goals (SDGs) and has established a long-term target to achieve carbon neutrality across TPI Polene Group by 2043. This commitment focuses on transitioning to low-carbon production, fostering innovation, and maximizing the use of renewable and clean energy in production processes. These efforts are aimed at delivering tangible reductions in greenhouse gas emissions.
TPI Polene Group adopts an organizational management that prioritizes sustainability and minimizes environmental impact at every stage of its operations (Green Management). We are committed to developing technology, enhancing production processes, and improving machinery to reduce CO2 emissions while protecting the environment. These efforts support our goal of achieving carbon neutrality by 2043. The total value of environmentally friendly investments exceeded Baht 20,000 million to reduce production costs, drive sustainable profit growth, and lower greenhouse gas (CO₂) emissions. One of the key projects involved converting municipal waste into waste-derived fuel to replace coal in electricity and cement production. Additionally, energy consumption from oil was reduced, and reliance on fossil fuels for all fossil fuel-powered machinery within the Company Group was minimized by switching to clean energy generated by the Company’s power plants. This project reduces environmental impact while also lowering production costs, making it a sustainable investment.
In 2024, TPI Polene Group successfully replaced coal with waste-derived fuel, accounting for 12% of the required heat volume, and plans to further increase this usage to 25% in the near future. Furthermore, TPI Polene Group is committed to using electricity from renewable energy sources, including ground-mounted and rooftop solar power plants, as well as wind power plants, to support carbon-free production.
In 2024, TPI Polene Group processed 2.92 million tons of various types of waste into alternative fuels to replace coal in the production of electricity and cement. This effort helped reduce greenhouse gas emissions by approximately 6.77 million tons of carbon dioxide equivalent (based on the emission factor for landfill waste, which emits 2.32 tons of greenhouse gases per ton of landfill waste). This achievement marks significant progress for TPI Polene Group in resource management and reducing environmental impact.
The Company has also invested in enhancing its environmentally friendly production efficiency by investing in a project to upgrade the dust collection system in the cement production process to enhance dust and greenhouse gas reduction. It has also reduced fossil fuel usage by producing cement using the Green Cement Process.
The Company has also invested in carbon-reducing technologies and processes, including electric-powered raw material conveyor systems, the conversion of mining machinery to electric motors (Green Mining), the use of electric vehicles for transportation (Green Logistics), and the adoption of electric forklifts in warehouses (Green Warehouse), to promote environmentally friendly practices across all areas.
In terms of products, the Company continues to focus on producing environmentally friendly construction materials (Green Products), including green cement, green ready-mixed concrete, green concrete roof tiles, green fiber cement, green lightweight concrete, paints, and other construction materials, by reducing clinker usage in cement production, such as producing hydraulic cement instead of Type 1 Portland cement, which significantly lowers CO₂ emissions.
With a policy focused on low-carbon production to mitigate the risks of climate change, the Company can achieve its long-term goal of reducing greenhouse gas emissions. Amid these risks, new business opportunities have also emerged, such as the sale of low-carbon cement, including hydraulic cement, which meets the demand in the global market that focuses on sustainability.
Consideration of Risks, Including Sustainability Risks (ESG Risks)
TPI Polene Group has continuously considered environmentally friendly investment projects by linking investment with strategic risk, operational risk, financial risk, and compliance risk. TPI Polene Group will consider risks, including environmental, social, and governance (ESG) risks, in its business operations to achieve the Sustainable Development Goals (SDGs), especially Goal 9 (Industry, Innovation, and Infrastructure) and Goal 13 (Climate Action).
Climate Change Management
In 2024, the Company obtained ISO14064-1 (Carbon Footprint Verification – CFV) certification on principles and organizational requirements for the quantification and reporting of greenhouse gas emissions and reductions, including requirements for the design, development, management, reporting and verification of an organization’s greenhouse gas emissions and reduction from BSI (Thailand) Co., Ltd. (BSI: British Standards Institution), reflecting the importance of implementing the TPI Polene Group’s mission in managing climate change.
Organic Agricultural and Health Product Business
TPI Polene Group is aware of the well-being of Thai society and therefore places importance on organic agricultural and health product business, including:
- Non-toxic or organic products for plants include organic fertilizers, soil conditioners and insect repellents, without the use of toxic chemical pesticides.
- Non-toxic or organic products for animals include biological microorganisms for livestock and fisheries, as well as toxin-free and antiviral agents for land and aquatic animals, eliminating the need for antibiotics.
- Biological hygiene products include probiotic drinks mixed with vitamins (Pro Vita), probiotic calcium and vitamin C supplements, and Bio Knox mouthwash, which helps eliminate microorganisms and bacteria in the mouth, preventing viruses from entering the body. The product line also includes cleaning products such as dishwashing liquid, stain remover, vegetable washing liquid, liquid bath soap, and hand soap.
- TPIPL drinking water, offering Thai people drinking water at a reasonable price.
Annual Operating Results for 2024
In 2024, the Company and its subsidiaries registered earnings before interest, taxes, depreciation and amortization (EBITDA) of Baht 8,830.47 million and reported profit in 2024 of Baht 2,425 million, which was comprised of normal operating profit of Baht 2,822 million, net foreign exchange gain of Baht 88 million and tax expense of Baht 485 million.
The Offering for Sale of Baht 15774.20 million Debentures in 2024
In 2024, TPI Polene Group successfully completed fundraising through the issuance and offering for sale of debentures, totaling Baht 15,774.20 million. (With TRIS Rating Company Limited affirmed credit rating of such debentures at the level of “A-” (Single A Minus) with a “Negative” Outlook on February 21, 2025.) The proceeds from the fundraising were utilized mainly to refinance mature debentures. The remaining funds were allocated in environmentally friendly projects to support the Group’s sustainability. In addition to cost reduction, these initiatives also help lower CO₂ emissions and mitigate global warming.
Financial Liquidity Management for Stability and Security
In addition to the investment that must consider environmental friendliness, TPI Polene Group will give importance to considering the payback period to be approximately 3-5 years to ensure risk management in line with the economic situation, industry trends and various uncertainties, including controlling the Net Debt/EBITDA ratio at an appropriate level that does not affect the Credit Rating of TPI Polene Group.
TPI Polene Group has a policy of close monitoring financial liquidity management by preparing short-term and long-term financial forecasts to effectively manage net cash flow and assess financial liquidity. This enables strategic financial planning in both the short and long term, ensuring stable and secure financial liquidity for the group. Additionally, the policy enhances financial flexibility, allowing the group to adapt to rapidly changing market conditions.
Performance Results for Sustainable Development
TPI Polene Group remains committed to conducting business with the goal of delivering strong financial returns while upholding its responsibilities to all stakeholders. The Company encourages and supports its business partners to engage in transparent operations, uphold good governance, and adhere to legal principles and regulations outlined in the Code of Conduct and ESG Policy. Additionally, TPI Polene Group emphasizes human rights promotion, employee well-being, and environmental preservation, while fostering sustainable coexistence with communities and society. These efforts align with the company’s goal of becoming a sustainable, globally recognized organization.
TPI Polene Group has consistently adhered to the principles of good corporate governance to build confidence among all stakeholders. The Company’s success in 2024 has been recognized both domestically and internationally, highlighting its excellence in management and responsible business operations, as summarized below:
- The Company Group was selected as one of the 100 listed companies with outstanding performance in the areas of Environment, Social, and Governance (ESG), or the ESG100 securities group, for 2024 in the Real Estate and Construction sector, marking the third consecutive year (2022–2024) based on the assessment by the Thaipat Institute.
- The Company Group has been evaluated as an “AA Sustainable Stock” for 2024, marking two consecutive years (2023–2024), by the Stock Exchange of Thailand.
- The Company Group was evaluated for the Corporate Governance Report of Thai Listed Companies (CGR) for 2024, achieving the 5-star “Excellent” level for two consecutive years (2023–2024), based on the Excellent CG Scoring by the Thai Institute of Directors (IOD).
- 4. The Company Group was granted the “Outstanding Social Activity Organization of the Year 2024” certificate of honor in the business sector category by the Ministry of Social Development and Human Security.
- Mr. Prachai Leopairatana, Chief Executive Officer of TPI Polene Public Company Limited, has been granted the royal decoration “Officier de l’Ordre de la Couronne” by the Kingdom of Belgium.
- 6. The Company Group has been certified for ISO 14064-1 (Carbon Footprint Verification – CFV) on the principles and organizational requirements for quantifying and reporting greenhouse gas emissions and reductions. This certification includes requirements for the design, development, management, reporting, and verification of an organization’s greenhouse gas emissions and reduction, awarded by BSI (Thailand) Co., Ltd. (BSI: British Standards Institution).
- The Company Group received the “Leading Industrial Conglomerate Group Thailand 2024” award from World Business Outlook magazine.
- The Company Group received the Certificate of Achievement as one of the “World’s Best Companies to Work for 2024” from World’s Leaders magazine.
On behalf of the Board of Directors of TPI Polene Public Company Limited and its affiliates, we extend our sincere gratitude to our shareholders, bondholders, business partners, financial institutions, executives, employees, and all stakeholders for their continued support and trust in the TPI Polene Group. This support has contributed to the group’s ongoing business success, enabling us to achieve sustainable and environmentally friendly growth. TPI Polene Group remains committed to furthering sustainable business development, while continuously creating value for society and the environment.
Sincerely Yours,
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Mr. Khantchai Vichakkana |
Mr. Prachai Leopairatana |