Ssangyong Cement, Operating Profit Margin of 17% in 2020... Impact of Cost Innovation

Despite Sales Decline Due to COVID-19, Operating Profit Increased
Result of Continued Large-Scale Investments to Enhance Competitiveness Amid Market Environment Changes

[Asia Economy Reporter Kim Jong-hwa] Ssangyong Cement demonstrated business performance that exceeded market expectations despite the challenging environment caused by the spread of COVID-19.

Ssangyong Cement announced on the 4th that its provisional annual consolidated results for last year recorded sales of 1.4708 trillion KRW and operating profit of 250.2 billion KRW.

Due to the contraction in the construction and real estate markets caused by COVID-19, combined with abnormal summer weather such as heavy rain and typhoons, domestic and international cement demand decreased and even sales prices fell, resulting in a 4.4% decrease in sales compared to 2019. However, operating profit increased by 9.2%, achieving an operating profit margin of 17%, a key profitability indicator.

The reason Ssangyong Cement was able to achieve such business results exceeding market expectations is largely attributed to continuous cost innovation activities. In particular, anticipating changes in the domestic recycled resources market, the production innovation investment plant, which involved an investment of about 100 billion KRW over two years, was completed last year and began full-scale operation of the recycled resource processing facility, which is evaluated to have contributed significantly.

Since the major shareholder changed to Han & Company in 2016, Ssangyong Cement has continuously sought differentiation through large-scale investments aimed at improving equipment efficiency and reducing manufacturing costs, including the world's largest waste heat power generation facility for a cement plant, energy storage systems (ESS), installation of new burners, and cooling system modifications.

A Ssangyong Cement official stated, "This year, difficult business conditions are expected due to the continued spread of COVID-19 leading to economic downturn and rising prices of key raw materials such as thermal coal," but also forecasted, "It will be possible to achieve improved results compared to last year, with sales of 1.56 trillion KRW and operating profit of 270 billion KRW."

This content was produced with the assistance of AI translation services.