SCG Dinner Talk

Jan 15, 2015

Hosted by Bualuang Securities

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Agenda:

� Business Updates

� ASEAN Updates

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Cement and Building Materials:� Volume recovery and stable pricing.� Good visibility on government’s infrastructure plan.

Chemicals:� Margin recovery, in-line with the global economic recovery.� Enhanced naphtha cracker economics.

Paper:� Continued stable growth environment.

2015 highlights:

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Cement: Thailand supply and demand

Total Domestic Growth Rate (% y-o-y)

- 10% -45% 15% -8% -1% 23% 6% 11% 9% -2% -6% -6% 1% 10% 3% 12% 7% - -

0

10

20

30

40

50

60

1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014e 2015e

MT Thai cement market – all players

+85-90% utilization

Capacity 56MT to 60MT(2015)

Domestic

Export

Avg. 7%

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Residential(50-52%)

CommercialRetail

(18-20%)

Gov’t(28-30%)

Total Marketby Volume

(100%)

FY2013 Q1/14 Q2/14 Q3/14 Q4/14e

7% 4% 0% -3% -

20% 14% 5% -4% -

3% 1% -2% -3% -

6% 1% -1% -2% -

% growth (y-o-y)

Cement: domestic market segments

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Cement: Thailand 2.4 trillion Baht infrastructure plan

Source: Ministry of Transport

Mass Transit (trains, bus, etc)

46%

Provincialhighways / roads

28%

Dual-track railways

16%

Others10%

Direct cement demand of <10 MT (8-10 years)

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Cement: Thailand mass transit

A) 2016 ground break (contractor finalized 2015)• orange line / 40 km• pink line / 36 km• yellow line / 30 km• airport link extension

B) 2015 ground break (contractor finalized 2015)• green line / 18 km

C) under construction• purple line 23 km (2017)• red line 26 km (2019)• blue line 27 km (2017)• light green 9 km (2017)

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Cement: other infrastructure projects

A) 1 meter track• 6 lines = 1,082 km, and 147,900 MB• ground break 2016 (contract signed 2015)• additional 6 lines being planned

B) 1.4 meter track� Chinese Government (planned)

3 lines = 1,060 km • Nakhon Ratchasima – Map Ta Phut (512 km)• Nakhon Ratchasima – Nong Khai (355 km)• Bangkok – Rayong (193 km)

� Japanese Government (planned)3 lines = 1,760 km• Mae Sot - Phitsanulok - Khon Kaen - Mukdahan (770 km)• Ban Phu Nam Ron – Bangkok - Mab Ta Phut (339 km)• Bangkok - Chiang Mai (653 km)

• North East – 3 projects (3,185 MB)• West – 1 project (1,400 MB)• East – 1 project (1,400 MB)• other numerous smaller projects• ground break 2015

(contract signed 2015)

Dual-track trains Provincial highways & roads

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Building Materials: domestic market demand

Residential(50-52%)

Gov’t(28-30%)

Products FY2013 9M/14

Housing Products Market -4% -8%

Ceramic Tiles Market -3% -6%

% growth (y-o-y)

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Cement: ASEAN presence

Indonesia 1.8 MT

Myanmar 1.8 MTThailand 23 MT

Laos 1.8 MT

Vietnam 0.2 MT

Cambodia 1.0 MT + 0.9 MT

NEW PLANTS: Start up

Cambodia 0.9 MT Q2/15

Indonesia 1.8 MT Q3/15

Myanmar 1.8 MT Q2/16

Laos 1.8 MT Q2/17

6.3 MT

EXISTING

Thailand 23 MT

Cambodia 1 MT

Vietnam 0.2 MT

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Chemicals: historical HDPE – naphtha margin

0

100

200

300

400

500

600

700

800

900

1,000

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

$/ton

Trough $300/ton

Trough$400/ton

Asian crisisUS crisis

EU crisis

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Note : Prices refer to SEA regional prices

Chemicals: current HDPE – naphtha margins

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Note : Prices refer to SEA regional prices

Chemicals: current PP – naphtha margins

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Note: Prices refer to FE regional prices

Chemicals: current PVC margins

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Chemicals: ethylene world supply growth

%

3%

8%

5%

1%

4%3% 3%

Incremental supply growth (MT):

“Flood of supply”

4% 4% 4% 4%3% 3%

4%5%

4%

2.8 4.4 4.6 4.7 4.7 3.5 10.5 6.9 2.0 5.0 4.5 5-6 5-7 6-8 7-9 6-8

Note: as of Sept/14

Potential capacity delay:� Permit delay� Execution risk� Feedstock security

0

1

2

3

4

5

6

7

8

9

10

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

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Paper: …is essentially a packaging business

Fibrous chain 23%

9M/14 EBITDA(7,510 MB)

Packaging chain 77%

13% EBITDA Margin

17% EBITDA Margin

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Paper:

� Regional / Geographical Growth (Targets: Vietnam an d Indonesia)

� Growing thru HVA Products / Services (such as High Performance Paper and Packaging)

Packaging Chain“Growing Packaging Business in ASEAN”

Primary Packaging

• Product protection• Marketing tools• Flexible packaging,

rigid, glass, or metal

Secondary Packaging

• Marketing tools• Information• Mainly paper-based

packaging; folding carton

Tertiary Packaging

• Logistics / transportation

• Handling / inventory management

• Corrugated container

Other Packaging

• Logistic support • Retail packaging

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Agenda

� Business Updates

� ASEAN Updates

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ASEAN updates: revenue in 9M/14

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ASEAN presence:

ASEAN assets = $2.4 billion (79,235 MB)

(17% of total assets)

International Staff = 15,252 persons

(30% of total staff)

Note: as of Sep/14

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Summary: Recent investment & new plant starts

Cement – Building Materials:� Global House Int’l: 50% JV with Siam Global House towards regional construction-related retail (200 MB) � Mortar: 2 MT capacity expansion (Lampang and Khon Kaen) (2,800 MB) – H1/16 start� Woodchip Cement Board : 55% stake M&A in Panel World, with cap of 2.4 Mill sqm. (550 MB)� Cement plants : (Laos, Myanmar, Indo, Cambodia) 6.3 MT (39,000 MB - $1,300 M) – Q2/15 - Q2/17 starts.� Ceramic (Italy) : 33% JV, 5 Mill sqm. (506 MB) - H1/15 start� Precast concrete : two precast plants totaling 2.4 Mill sqm (2,500 MB) – Q1/15 start� MG Stone Slabs : 400,000 sqm. green-field (1,500 MB) – Q2/15 start.

Chemicals:� Norner Group (Norwegian innovation and technology): 51% stake M&A (340MB)� Debottleneck of Chandra Asri (Indonesia) : Ethylene capacity gained up 43% - end of 2015 start� LDPE coating grade (HVA) of 60,000 tons, totaling 152,000 tons per year, by mid-2016 in Thailand.

Paper:Fibrous chain:� Glassine paper (HVA) : 1,825 MB , Upgrade paper machine for 60,000 tons/yr – Q2/16 start� Nippon paper’s 30% stake in SCG Paper’s Fibrous cha in.Packaging chain:� Flexible Packaging (HVA) : 22% stake M&A in Prepack of 14,000 tons (340MB)� Box plants

- Indonesia (Indoris) : 90% stake M&A, 8,000 tons (290 MB)� Packaging paper in Thailand : 400,000 tons brown-field (6,700 MB).- Q4/14 start

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ASEAN summary:

Indonesia:� Start up of the green-field cement plant in West-Java in Q3/15, which is Integrated in to SCG’s

existing assets.� Continued efforts in the chemicals and paper businesses.

Vietnam :� Utilize Prime Group (75 million sqm) as the ASEAN production hub (domestic and export sales).� Decision on the Long Song Petrochemicals Complex (flexible feedstock cracker and integrated

downstream operations).� Leverage Vina Kraft and box plants towards packaging solution.

Myanmar:� Increased sales levels of cement-building materials products, which will lead to the start-up of the

cement plant in Q2/16.

Cambodia:� Start up of the second cement plant in Q2/15.

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Q&A