2.  Business Operation

During 2007 – 2009, SCG has divested main investments as follows:

In 2009

-   SCG Chemicals acquired around 25 percent in GTC Technology (GTC)
    which is a global technology licensor and engineering services
    provider in petrochemicals and refinery industries including
    aromatics recovery and purification, paraxylene production, and
    styrene recovery from byproducts of the naphtha cracker. The
    acquisition of such stakes of GTC will help improve SCG Chemicals’
    technological capability and high value added product development
    capability, which is in line with SCC’s High Value Added Product &
    Service Development core strategy. Furthermore, the cooperation
    between SCG Chemicals’ and GTC’s R&D personnel will help strengthen
    SCG Chemicals’ R&D competency.

-   SCG Paper signed an agreement to acquire 100% of shares in New Asia
    Industries Company Limited which is the leading producer and
    distributor of corrugated containers.

-   SCG Building Materials signed the Joint Venture Agreements with
    Sekisui Chemical Co., Ltd. (“Sekisui”) to manufacture and sell the
    Modular Home. Modular Home is an innovation of construction
    technology featuring the confident quality, safety, comfort, clean
    indoor environment, energy saving, and cost saving for life cycle of
    houses. Under the Joint Venture Agreements, 2 companies will be
    established as follows:

    1.  Sekesui – SCG Industry Co., Ltd. is an associated company which
        is the manufacturer of housing components of Modular Home.
        Sekisui and SCG Building Materials will hold 51 percent and 49
        percent of the company’s stake, respectively

    2.  SCG – Sekesui Sales Co., Ltd. is a subsidiary company which
        provides the installation of housing components and selling of
        Modular Home including after sales service. Sekisui and SCG
        Building Materials will hold 49 percent and 51 percent of the
        company’s stake, respectively.

In 2008

-   SCG Chemicals invested in ordinary shares of a joint venture, Long
    Son Petrochemicals Co., Ltd., which was newly established to produce
    raw materials for plastic resins, Polyethylene and Polypropylene in
    Vietnam. The company is jointly controlled by companies under SCG
    with 71 percent shareholding (direct and indirect investment of The
    Siam Cement PLC is 61 percent) and a partner in Vietnam with the 29
    percent remaining stakes.

  Moreover, the group sold all of its 48 percent interest in the shares
  of Pacific Plastics (Thailand) Co., Ltd., an associate of SCG
  Chemicals, to The Dow Chemical Company.

-   SCG Building Materials acquired 61.9 percent of ordinary shares of
    Thai-German Ceramic Industry PLC (TGCI) of which principal business
    activities are manufacture and distribution of ceramic floor and
    wall tiles, and property development. The Group has included TGCI’s
    financial statements into SCG’s consolidated financial statements
    since the third quarter of 2008.

  Moreover, the Group acquired an additional 9 percent of the ordinary
  share of the Sosuco Ceramic Co., Ltd. in the fourth quarter of 2008,
  resulting in a 54 percent shareholding. Starting from 1 January 2009,
  the Group obtains control over the financial and operating policies
  and obtains benefit from activities of the company. The Group will
  include operating results of such company in the SCG’s consolidated
  financial statements from the first quarter of 2009.

In 2007

With the reduction in non-core business, the Group sold a 35 percent
interest in its investment in shares of Siam Yamato Steel Co., Ltd. to
the current co-investor resulting remaining 10 percent interest and sold
a 24 percent interest in its investment in shares of Siam Furukawa Co.,
Ltd. to Furukawa Battery (in Japan) resulting remaining 5 percent
interest and sold its investment in 9 percent interest in The Aromatics
(Thailand) Public Company Limited, (currently, amalgamated as PTT
Aromatics and Refining Public Company Limited), which was classified as
in available-for-sale marketable security.

-   SCG Paper invested in common stock of following companies:

    -   Invested entirely in ordinary shares of Thai Containers Rayong
        Co.,Ltd. which was newly established company that produces
        corrugated sheet (direct and indirect investment of The Siam
        Cement PLC was 68.86 percent)

    -   Invested in ordinary shares of Vina Kraft Paper Co., Ltd. which
        was a newly established company under a joint venture with Rengo
        Co., Ltd. (Japan) that produces packaging paper in Vietnam. SCG
        paper holds 70 stakes in the new company (direct and indirect
        investment of The Siam Cement PLC was 68.86 percent)

    -   Invested entirely in ordinary shares of two foreign container
        producers which are TCG Rengo Subang (M) Sdn. Bhd. (Malaysia)
        and TCG Rengo Subang (S) Limited (Singapore) (direct and
        indirect investment of The Siam Cement PLC was 68.86 percent)

    -   Invested in ordinary shares of Thai British Depost Co.,Ltd.
        which was a newly established company that provides printing
        including distribution. SCG paper holds 51 stakes in the new
        company (direct and indirect investment of The Siam Cement PLC
        was 24.98 percent)

        -   SCG Investment invested in ordinary shares of Siam Kubota
            Tractor Co.,Ltd. which was a newly established company under
            a joint venture with Kubota Corporation (Japan) that
            produces tractors used in Thailand’s agriculture. The
            proportion is 40 percent holdings.

  Since The Siam Cement PLC has become a holding company, aiming for a
  transparent management, efficient resource management, strong
  long-term business strategy and good governance, the Company has
  organized its structure as follows:

-   Five strategic business units, comprising of SCG Chemicals, SCG
    Paper, SCG Cement, SCG Building Materials and SCG Distribution.

-   SCG Investment

  Attribute of each business unit is summarized hereunder:

SCG Chemicals

SCG Chemicals Co., Ltd. is a holding company for which the Chemicals
Business of The Siam Cement Group operates under, through an integrated
production of both upstream products (Olefins) and downstream products
(Polyolefins). In addition, the business also invests in Polyvinyl
Chloride (PVC) business by holding shares in Thai Plastic and Chemicals
PLC (TPC).

+---------------------+------------------------------------------------+
| Key Information     |                                                |
+---------------------+------------------------------------------------+
| Capacity            | -   Olefins 1,200,000 tons per year            |
|                     |                                                |
|                     | -   Polyolefins 1,080,000 tons per year        |
|                     |                                                |
|                     | -   PVC 766,000 tons per year                  |
+---------------------+------------------------------------------------+
| Main Products       | Olefins, Polyolefins, and PVC products         |
+---------------------+------------------------------------------------+
| Strengths           | -   High competitive advantage in upstream     |
|                     |     products.                                  |
|                     |                                                |
|                     | -   Low Olefins/ Polyolefins production costs. |
|                     |                                                |
|                     | -   Customer base in 109 countries.            |
+---------------------+------------------------------------------------+
| Major Business      | -   Emphasize on Polyolefins and PVC product   |
| Policy              |     portfolio which is the business’s strength |
|                     |     to increase the business’s competitive     |
|                     |     advantage.                                 |
|                     |                                                |
|                     | -   Become a regional leader in Olefins,       |
|                     |     Polyolefins, and PVC business.             |
|                     |                                                |
|                     | -   Expand global business reach to minimize   |
|                     |     risks from market fluctuation and to       |
|                     |     receive prompt market insights and news    |
+---------------------+------------------------------------------------+
| Business            | -   Seek business opportunities in both        |
| Development Policy  |     domestic and international markets,        |
|                     |     focusing on Olefins, Polyolefins, and PVC  |
|                     |     products.                                  |
|                     |                                                |
|                     | -   Develop high value added products and      |
|                     |     improve variety of products through        |
|                     |     innovation of new products and services to |
|                     |     address customers’ needs and business      |
|                     |     competitiveness.                           |
|                     |                                                |
|                     | -   Improve effectiveness of production and    |
|                     |     supply chain processes through Total       |
|                     |     Production Management (TPM) system and     |
|                     |     Total Quality Management (TQM) system in   |
|                     |     order to reduce costs, control quality of  |
|                     |     production process, and continuously       |
|                     |     develop sustainable environment            |
|                     |     management.                                |
+---------------------+------------------------------------------------+

SCG Paper

SCG Paper PLC was established in 1980 by The Siam Cement PLC and Siam
Kraft Co., Ltd to engage in manufacturing and sale of pulp. Its initial
registered capital was Baht 100 million under the name of The Siam Pulp
and Paper Co., Ltd. The Company was later converted into a public
company in 1994 and raised its capital to Baht 1,400 million. Currently,
the registered capital is amounted to Baht 1,563 million. The Company
was delisted from the Stock Exchange of Thailand in 2003 and was
thereafter renamed to SCG Paper PLC in April 2007.

The SCG Paper PLC and subsidiaries is the country’s only integrated
producer of high quality pulp, paper, and containers. Their main
businesses are Pulp, Printing and Writing Paper, Packaging Paper, and
Corrugated Containers.

+---------------------+------------------------------------------------+
| Key Information     |                                                |
+---------------------+------------------------------------------------+
| Capacity            | -   Packaging Paper 1,880,000 tons per year    |
|                     |                                                |
|                     | -   Corrugated Containers 692,000 tons per     |
|                     |     year                                       |
|                     |                                                |
|                     | -   Pulp 430,000 tons per year                 |
|                     |                                                |
|                     | -   Printing and Writing paper 570,000 tons    |
|                     |     per year                                   |
+---------------------+------------------------------------------------+
| Main Products       | Kraft paper, duplex board, corrugated          |
|                     | containers, pulp and printing & writing paper. |
+---------------------+------------------------------------------------+
| Strengths           | -   Only integrated producer of pulp, paper,   |
|                     |     and containers in Thailand.                |
|                     |                                                |
|                     | -   World-class quality.                       |
|                     |                                                |
|                     | -   Continual offering innovative products and |
|                     |     services.                                  |
|                     |                                                |
|                     | -   Strong domestic distribution channel and   |
|                     |     marketing system, as well as the worldwide |
|                     |     exports.                                   |
|                     |                                                |
|                     | -   Efficient production cost control.         |
|                     |                                                |
|                     | -   Total Quality Management – TQM.            |
+---------------------+------------------------------------------------+
| Major Business      | -   Maintain domestic market leadership.       |
| Policy              |                                                |
|                     | -   Aspiring for regional leadership in paper  |
|                     |     and packaging business.                    |
|                     |                                                |
|                     | -   Focus on sustainable growth strategy and   |
|                     |     providing good returns to shareholders and |
|                     |     stakeholders.                              |
|                     |                                                |
|                     | -   Conserve the environment.                  |
+---------------------+------------------------------------------------+
| Key Information     |                                                |
+---------------------+------------------------------------------------+
| Business            | -   Improve existing machines for higher       |
| Development Policy  |     efficiency.                                |
|                     |                                                |
|                     | -   Develop innovative products to better      |
|                     |     serve customers’ needs                     |
|                     |                                                |
|                     | -   Seek opportunities in expanding its        |
|                     |     business with Merger and Acquisition as a  |
|                     |     priority.                                  |
|                     |                                                |
|                     | -   Develop knowledge, skill and experience    |
|                     |     for all levels of employee to maintain     |
|                     |     competitive advantage to achieve a         |
|                     |     regional leader.                           |
+---------------------+------------------------------------------------+

SCG Cement

SCG Cement Co., Ltd. was founded on November 11, 1998, upon the transfer
of all cement related assets from The Siam Cement Public Company
Limited. The business is primarily responsible for producing various
types of cement and concrete products of which comprise: 1) Grey Cement
2) Concrete Products 3) Dry Mortar 4) White Cement 5) Refractory
Products. It also provides plant and machinery installation and
maintenance services, instrument metrological services, including energy
conservation consultation and disposal of industrial waste.

+---------------------+------------------------------------------------+
| Key Information     |                                                |
+---------------------+------------------------------------------------+
| Capacity            | Grey Cement – Domestic: 23.2 million tons per  |
|                     | year                                           |
|                     |                                                |
|                     | Grey Cement – Cambodia: 0.85 million tons per  |
|                     | year                                           |
+---------------------+------------------------------------------------+
| Main Products       | Grey cement, concrete products (ready-mixed    |
|                     | concrete, prefabricated concrete floor, and    |
|                     | post tension concrete floor), dry mortar,      |
|                     | white cement, fireclay bricks, and special     |
|                     | refractory.                                    |
+---------------------+------------------------------------------------+
| Brand               | -   Cement: Elephant, Tiger Brands             |
|                     |                                                |
|                     | -   Ready-Mixed Concrete: CPAC Brand           |
+---------------------+------------------------------------------------+
| Major Business      | -   Step up as a regional leader.              |
| Policy              |                                                |
|                     | -   Maintain price level and market stability. |
|                     |     Enhance its domestic market leadership.    |
|                     |                                                |
|                     | -   Create high value products & services      |
|                     |                                                |
|                     | -   Continuously conserve natural resources    |
|                     |     and environment as well as join creative   |
|                     |     activities with local community and social |
|                     |     development program.                       |
+---------------------+------------------------------------------------+
| Key Information     |                                                |
+---------------------+------------------------------------------------+
| Business            | -   Continuously develop and improve product   |
| Development Policy  |     quality.                                   |
|                     |                                                |
|                     | -   Continuously reduce costs and expenses,    |
|                     |     especially energy costs and raw material   |
|                     |     costs, with fuel and raw material          |
|                     |     substitutes.                               |
|                     |                                                |
|                     | -   Develop knowledge, skills, and competency  |
|                     |     for every employee with assorted methods.  |
|                     |                                                |
|                     | -   Bring innovative idea to develop products  |
|                     |     and working process.                       |
+---------------------+------------------------------------------------+

SCG Building Materials

SCG Building Materials Co., Ltd. was established to concentrate on the
production of building materials and related products of SCG. The
business employs modern production technology and quality control along
with its experts, enabling the business to become market leaders for
both domestic market and ASEAN countries.

+--------------------+-------------------------------------------------+
|  Key Information   |                                                 |
+--------------------+-------------------------------------------------+
| Capacity           | -   Fiber-cement roof sheet 40 million Sq. M.   |
|                    |     per year                                    |
|                    |                                                 |
|                    | -   Concrete roof tile 30 million Sq. M. per    |
|                    |     year                                        |
|                    |                                                 |
|                    | -   Ceramic tile 105 million Sq. M. per year    |
|                    |                                                 |
|                    | -   Ceiling and wall products 50 million Sq. M. |
|                    |     per year                                    |
|                    |                                                 |
|                    | -   Concrete products 3.5 million Sq. M. per    |
|                    |     year                                        |
+--------------------+-------------------------------------------------+
| Main Products      | -   Roofing products: fiber-cement roof sheet,  |
|                    |     concrete roof tile and ceramic roof tile.   |
|                    |                                                 |
|                    | -   Ceramic floor and wall tile.                |
|                    |                                                 |
|                    | -   Ceiling and wall products                   |
|                    |                                                 |
|                    | -   Concrete blocks, concrete floor tiles, and  |
|                    |     precast concrete walls.                     |
+--------------------+-------------------------------------------------+
| Brand              | -   Roofing products: Elephant, CPAC Monier,    |
|                    |     Excella, NeuStile and Ayara                 |
|                    |                                                 |
|                    | -   Ceramic floor and wall tiles: COTTO, SGI    |
|                    |     Tiles, SOSUCO and CAMPANA                   |
|                    |                                                 |
|                    | -   Ceiling and wall products: Chang            |
|                    |                                                 |
|                    | -   Concrete blocks, concrete floor tiles, and  |
|                    |     precast concrete walls: Chang               |
+--------------------+-------------------------------------------------+
|  Key Information   |                                                 |
+--------------------+-------------------------------------------------+
| Strengths          | -   Market leader with continuous product       |
|                    |     development.                                |
|                    |                                                 |
|                    | -   Competitive production costs.               |
|                    |                                                 |
|                    | -   Good distribution network: exclusive dealer |
|                    |     network.                                    |
+--------------------+-------------------------------------------------+
| Major Business     | -   Maintain market leadership by developing    |
| Policy             |     products and services that highest respond  |
|                    |     to customer needs.                          |
|                    |                                                 |
|                    | -   Continuously develop organization and       |
|                    |     employees.                                  |
+--------------------+-------------------------------------------------+
| Business           | -   Develop innovative idea in developing a     |
| Development Policy |     product, production and working process.    |
|                    |                                                 |
|                    | -   Build growth by adding related new products |
|                    |     and services and developing distribution    |
|                    |     channels which customers can receive        |
|                    |     product information, consultation and       |
|                    |     design service and purchase products and    |
|                    |     services completely at one shop.            |
|                    |                                                 |
|                    | -   Enhance a strong leadership of building     |
|                    |     products in ASEAN by expanding distribution |
|                    |     network.                                    |
+--------------------+-------------------------------------------------+

SCG Distribution

SCG Distribution Co., Ltd. was established in accordance to the Group’s
restructuring plan in 1998 as a holding company for local and overseas
trading, selling and distribution, for industrial supplies, building
materials and home improvement products. Over 50,000 product items from
the Group and external companies are presented. Non-group products will
be added to increase the assortment in the future.

Core companies are:

-   SCG Network Management Co., Ltd.: Domestic distribution.

-   SCG Logistics Management Co., Ltd.: Distribution and Intra-Regional
    logistics services including transportation and warehouse
    management.

-   SCT Co., Ltd.: International trading.

-   SCG Experience Co., Ltd.: SCG Flagship store aiming to educate and
    support consumers toward a better home building and living.

Vision

By the year 2015, SCG Distribution will be recognized as an ASEAN market
leader by utilizing supply chain insights to deliver localized logistics
services, constantly developing and managing multiple distribution
channels, offering customized global trading services and focusing on
the building materials and industrial supplies.

We will be a trustworthy, responsive business partner and a
customer-centric organization through world-class operational excellence
and technology alignment.

+---------------------+------------------------------------------------+
| Key Information     |                                                |
+---------------------+------------------------------------------------+
| Main Products       | Group products and external products sold      |
|                     | through Home Mart and SCG Authorized Dealer    |
|                     | stores, overseas distribution network and      |
|                     | logistics                                      |
+---------------------+------------------------------------------------+
| Strengths           | -   Distribution network through dealers and   |
|                     |     company-owned outlets throughout the       |
|                     |     country.                                   |
|                     |                                                |
|                     | -   Modern, accurate, and fast transportation  |
|                     |     network and warehouse management.          |
|                     |                                                |
|                     | -   34 foreign branches in 22 countries around |
|                     |     the world.                                 |
|                     |                                                |
|                     | -   Well-known products.                       |
+---------------------+------------------------------------------------+
| Major Business      | -   Strengthen existing businesses whereas     |
| Policy              |     continuously develop new high-valued       |
|                     |     businesses and create sustainable growth   |
+---------------------+------------------------------------------------+
| Business            | -   Retain Strategic Customers and Strategic   |
| Development Policy  |     Suppliers by increasing value in Supply    |
|                     |     Chain, creating trust and long-term        |
|                     |     relationship, and developing new           |
|                     |     customers, new or high value-added         |
|                     |     products & services and distribution       |
|                     |     channels to sustain business growth        |
|                     |                                                |
|                     | -   Enhance effective distribution channels &  |
|                     |     logistics network in ASEAN and global      |
|                     |     trading network to support SCG and Non SCG |
|                     |     products and key customers by focusing on  |
|                     |     proactive and in-depth execution.          |
|                     |                                                |
|                     | -   Increase operation efficiency by improving |
|                     |     business process and IT system and by      |
|                     |     applying Total Quality Management Concept  |
|                     |     into work processes                        |
+---------------------+------------------------------------------------+

SCG Investment

SCG Investment was established to manage investment in joint venture
businesses of SCG, such as agricultural machinery business, automotive
business, automotive accessories and equipments business, steel
business, and industrial land business.

SCG Investment, with cooperation from major investors, develops
businesses within the Group in terms of budget planning, new product
introduction or overseas expansion as well as customer service
improvement to ultimately achieve objectives of both operating
performance and cash generation.

Revenue Structure

  For 2009

[]

Remark: Financial figures are classified according to business unit
before inter-group adjustments

Remark: * Equity income from associates by equity method

The Siam Cement Public Company Limited investment in subsidiaries,
associates,

jointly-controlled entity and other companies of which their operations
are significant.

[]

Remark: * Directly and indirectly holding the Company, associates and
other companies

[]

Remark: * Directly and indirectly holding the Company, associates and
other companies

[]

Remark: * Directly and indirectly holding the Company, associates and
other companies

[]

Remark: * Directly and indirectly holding the Company, associates and
other companies

[]

Remark: * Directly and indirectly holding the Company, associates and
other companies

[]

Remark: * Directly and indirectly holding the Company, associates and
other companies