SCG Packaging Delays US Rigid Packaging Expansion Amid Economic Uncertainty

SCG Packaging Plc (SCGP) has postponed its planned expansion into the United States rigid packaging market, citing financial infeasibility linked to economic slowdown and rising cost pressures.

Chief executive Wichan Jitpukdee said the company’s board has not approved the investment, noting that inflation, supply chain constraints, and broader global economic uncertainty continue to weigh on the US market. The project had already been put on hold in late 2025 due to labour shortages.

SCGP said it will engage with US business leaders to reassess the investment environment before making further decisions. The company had previously explored establishing local production, including potential mergers and acquisitions, to mitigate tariff impacts.

Instead of building a facility, SCGP is considering exporting rigid packaging products from Thailand and Vietnam to serve US demand. Rigid packaging products include materials such as plastics, glass, metal, and paperboard, commonly used for their durability and protective qualities.

The company highlighted that rising resin costs—driven by higher energy prices linked to geopolitical tensions in the Middle East—have further pressured the economics of the project. SCGP expects global packaging demand growth to slow by 2–4%, with clearer impacts anticipated by the third quarter of 2026.

Despite the delay, SCGP reaffirmed its 2026 revenue target of 130 billion baht, supported by stronger growth in Vietnam compared with Indonesia and Thailand. The company continues to focus on consumer packaging in Southeast Asia, alongside investments in artificial intelligence and machine learning to improve production efficiency.

SCGP also reported improved performance in Indonesia, supported by cost management and value chain integration following the full acquisition of PT Prokemas Adhikari Kreasi.

For the first quarter of 2026, SCGP posted revenue of 29.3 billion baht, down 9% year-on-year, while net profit rose 74% to 1.56 billion baht.