2.  Business Operation

During 2009 – 2011, SCG has made significant investment / divestments as
follow:

In 2011

-   SCG Chemicals acquired a 30% stake in PT Chandra Asri Petrochemical
    Tbk, Indonesia’s leading petrochemical company.

-   SCG Paper Thai Container Group (TCG); a 70:30 joint venture between
    SCG Paper and Rengo Company Limited, acquired 100% of the ordinary
    shares of Alcamax Packaging (Vietnam) Co., Ltd. (Alcamax); a
    manufacturer and distributor of corrugated containers in Vietnam.

-   SCG Cement acquired 99.20% of the ordinary shares of Buu Long
    Industry & Investment Joint Stock Company (Buu Long); a manufacturer
    and distributor of white cement in Vietnam.

-   SCG Building Material acquired 93.47% of the ordinary shares of PT
    Keramika Indonesia Assosiasi Tbk (KIA); a manufacturer and
    distributor of ceramic tiles in Indonesia.

-   SCG Distribution acquired 99.09% of the ordinary shares of PT Kokoh
    Inti Arebama Tbk (KOKOH); a distributor specializes in building
    materials in Indonesia.

Furthermore, SCG has sold its entire 5% of Siam United Steel (1995) Co.,
Ltd. to Nippon Steel Corporation.

In 2010

-   SCG Paper Thai Container Group (TCG); a 70:30 joint venture between
    SCG Paper and Rengo Company Limited, acquired the entire 100% stake
    in New Asia Industries Company Limited (NAI); a Vietnam’s producer
    and distributor of corrugated containers in Vietnam. The investment
    in NAI would allow SCG Paper to expand its capacity and customer
    base within ASEAN.

-   SCG Building Materials acquired 67.6% stake in Quality Construction
    Products Public Company Limited (Q-con); the manufacturer and
    distributor of autoclave lightweight concrete.

Furthermore, SCG has sold its remaining 75% stake in SIC Industrial Land
Company Limited to Hemaraj Land and Development Public Company Limited
in the third quarter of 2010. In the fourth quarter of 2010, the Group
also made a divestment of 17% stake in PTT Chemical Public Company
Limited (“PTTCH”) to both local and international investors. Following
the transaction, SCG has a remaining stake of 4.93% in PTTCH’s share and
as a result, has changed PTTCH’s investment status from “associate
company” to “other company”.

In 2009

-   SCG Chemicals acquired approximately 25 % stake in GTC Technology
    (GTC); 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 would 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 would help strengthen
    SCG Chemicals’ R&D competency.

-   SCG Building Materials signed the Joint Venture Agreement 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
    house. Under the Joint Venture Agreements, 2 companies have been
    established as the 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 would hold 51 % and 49 % 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 would hold 49 % and 51 % of the company’s
        stake, respectively.

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 through holding shares in Thai Plastic and
Chemicals PLC (TPC).

+---------------------+------------------------------------------------+
| Key Information     |                                                |
+---------------------+------------------------------------------------+
| Capacity            | -   Olefins 2,900,000 tons per year            |
|                     |                                                |
|                     | -   Polyolefins 1,900,000 tons per year        |
|                     |                                                |
|                     | -   PVC 886,000 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 120 countries.            |
+---------------------+------------------------------------------------+
| Major Business      | -   Emphasize on development of Polyolefins    |
| Policy              |     and PVC high value added products to       |
|                     |     enhance business’s competitive advantage   |
|                     |     and increase products varieties.           |
|                     |                                                |
|                     | -   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.                                  |
|                     |                                                |
|                     | -   Focus on R&D and 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 794,000 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. |
+---------------------+------------------------------------------------+
| Brand               | -   Printing and writing paper                 |
|                     |                                                |
|                     | -   Idea green, Idea work, Idea max, Supreme,  |
|                     |     Ultimate                                   |
|                     |                                                |
|                     | -   PRO Series – Offset PRO New, Matt PRO,     |
|                     |     Card PRO, Note PRO, Text PRO               |
|                     |                                                |
|                     | -   Green Series – Green Offset, Green Card,   |
|                     |     Green Matt, Green Form                     |
|                     |                                                |
|                     | -   Packaging paper & container: Green Carton  |
+---------------------+------------------------------------------------+
| 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.                  |
+---------------------+------------------------------------------------+
| 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 employees to maintain    |
|                     |     competitive advantage and become a         |
|                     |     regional leader.                           |
+---------------------+------------------------------------------------+

SCG Cement

SCG Cement Co., Ltd, previously the cement business unit of the Sian
Cement Public Company (SCC), was founded on November 11, 1998, upon the
transfer of all cement related businesses from SCC. SCG Cement is
primarily responsible for production of various cement types and
concrete products of which comprise: 1) Grey Cement 2) Concrete Products
3) Dry Mortar 4) White Cement 5) Refractory Products. Besides, we also
provide 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: 0.90 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 and Tiger Brands          |
|                     |                                                |
|                     | -   Ready-Mixed Concrete: CPAC Brand           |
+---------------------+------------------------------------------------+
| Strengths           | -   Major producer of cement and concrete      |
|                     |     products in ASEAN and major cement         |
|                     |     exporter for international market          |
|                     |                                                |
|                     | -   Embedded sustainable development           |
|                     |     philosophy into company’s policy and       |
|                     |     operations. SCG Cement is the only company |
|                     |     in Thailand to join the World Business     |
|                     |     Council for Sustainable Development-Cement |
|                     |     Sustainability Initiative (WBCSD CSI)      |
|                     |                                                |
|                     | -   Rigorous in-house R&D efforts to create    |
|                     |     innovative products and services.          |
+---------------------+------------------------------------------------+
| Major Business      | -   Expand cement business mainly in ASEAN in  |
| Policy              |     order to be a regional leader              |
|                     |                                                |
|                     | -   Maintain price level and market stability  |
|                     |     as well as enhance its domestic market     |
|                     |     leadership                                 |
|                     |                                                |
|                     | -   Create high value products and services to |
|                     |     increase customer satisfaction             |
|                     |                                                |
|                     | -   Continuously conserve natural resources    |
|                     |     and environment as well as take part in    |
|                     |     creative activities and social development |
|                     |     program with local community.              |
+---------------------+------------------------------------------------+
| Business            | -   Constantly enhance and improve product     |
| Development Policy  |     quality.                                   |
|                     |                                                |
|                     | -   Continuously reduce costs and expenses,    |
|                     |     especially energy and raw material costs,  |
|                     |     by using fuel and raw material             |
|                     |     substitutes.                               |
|                     |                                                |
|                     | -   Develop all employees’ working skills and  |
|                     |     knowledge as well as competency through    |
|                     |     various methods in response to the         |
|                     |     corporate growth strategy.                 |
|                     |                                                |
|                     | -   Encourage innovative ideas and put into    |
|                     |     practice in order to develop products and  |
|                     |     improve 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 50 million Sq. M.  |
|                     |     per year                                   |
|                     |                                                |
|                     | -   Concrete roof tile 30 million Sq. M. per   |
|                     |     year                                       |
|                     |                                                |
|                     | -   Ceramic tile 130 million Sq. M. per year   |
|                     |                                                |
|                     | -   Board & Wood substitutions 70 million      |
|                     |     Sq. M. per year                            |
|                     |                                                |
|                     | -   Aerated lightweight concrete 15 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.               |
|                     |                                                |
|                     | -   Board & Wood substitutions Fiber Cement    |
|                     |                                                |
|                     | -   Concrete blocks, concrete floor tiles, and |
|                     |     precast concrete walls                     |
|                     |                                                |
|                     | -   Aerated lightweight concrete               |
+---------------------+------------------------------------------------+
| Brand               | -   Roofing products: Chang, CPAC Monier,      |
|                     |     Excella, NeuStile and Ayara                |
|                     |                                                |
|                     | -   Ceramic floor and wall tiles: COTTO, SGI   |
|                     |     Tiles, SOSUCO and CAMPANA                  |
|                     |                                                |
|                     | -   Board & Wood substitutions: Chang          |
|                     |                                                |
|                     | -   Concrete blocks, concrete floor tiles, and |
|                     |     precast concrete walls: Chang              |
|                     |                                                |
|                     | -   Aerated lightweight concrete: Q-Con        |
+---------------------+------------------------------------------------+
| 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. is a holding company for distribution,
logistics, and trading business in Thailand and overseas. The company’s
main products include over 50,000 items of building materials and home
improvement products as well as industrial supplies from SCG and non-SCG
sources.

Major companies are:

-   SCG Network Management Co., Ltd.: Domestic distributor of SCG
    building material products.

-   SCG Sourcing Co., Ltd.: Domestic sourcing and distributor of non-SCG
    building material products.

-   SCG Logistics Management Co., Ltd.: Logistics services including
    transportation and warehouse management for SCG and non-SCG
    customers

-   SCG Trading Co., Ltd.: International trading and develop
    distribution channel in ASEAN.

-   SCG Experience Co., Ltd.: Flagship Store displayed SCG’s innovations
    in building materials and other SCG’s products.

-   PT KOKOH Inti Arebama Tbk: Building materials distributor in
    Indonesia.

+---------------------+------------------------------------------------+
| Key Information     |                                                |
+=====================+================================================+
| Main Products       | Distribution, logistics and trading services   |
|                     | for SCG and non-SCG products through HOME MART |
|                     | and SCG Authorized Dealers and also            |
|                     | international trading network.                 |
+---------------------+------------------------------------------------+
| Brand               | -   HOME MART, HOME EXPRESS, HOME CHOICE, OK   |
|                     |     OUTLET and PRO SHOP service center         |
|                     |                                                |
|                     | -   Transport OK                               |
+---------------------+------------------------------------------------+
| Strengths           | -   Strong nationwide distribution network     |
|                     |     reaching all target customers              |
|                     |                                                |
|                     | -   Modern, accurate, and fast transportation  |
|                     |     network and warehouse management           |
|                     |                                                |
|                     | -   35 foreign branches in 21 countries around |
|                     |     the world.                                 |
+---------------------+------------------------------------------------+
| Major Business      | -   Strengthen distribution channel of SCG     |
| Policy              |                                                |
|                     | -   Expand customer bases outside SCG          |
|                     |                                                |
|                     | -   Continuous improvement for the highest     |
|                     |     efficiency and serve customer needs        |
+---------------------+------------------------------------------------+
| Business            | -   Retain strategic customers and strategic   |
| Development Policy  |     suppliers by increasing value in Supply    |
|                     |     Chain, provide high-value added products   |
|                     |     and services, and developing new customers |
|                     |     both domestic and export.                  |
|                     |                                                |
|                     | -   Utilize domestic distribution and          |
|                     |     logistics network to better meet customer  |
|                     |     demand, expand distribution and logistics  |
|                     |     network in ASEAN, and strengthen overseas  |
|                     |     network.                                   |
|                     |                                                |
|                     | -   Increase operational efficiency by         |
|                     |     improving business process and IT system,  |
|                     |     applying Total Quality Management Concept  |
|                     |     into work processes, and encouraging       |
|                     |     innovation.                                |
+---------------------+------------------------------------------------+

SCG Investment

SCG Investment was established to manage investment in jointly invest
with leading companies in other countries, such as agricultural
machinery business, automotive business, automotive accessories and
equipments business, and steel business. The returns are in term of
dividend and management fee.

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 2011

[]

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

Remark: * Equity income from associates by equity method

[]

[]

[]

[]

[]

[]

[]