SCG has top ambitions for Vietnam

Asked if it was interested in buying a stake of Viglacera Corp., Vietnam’s biggest construction materials user, and in other mergers and acquisitions (M&A) deals, Anuvat Chalermchai, brand director of SCG Cement-Building Materials – one of SCG’s major operations, told VIR that Viglacera was attractive and that SCG would “grab any possible M&A opportunities toward further expanding its sustainable business in Vietnam to become a sustainable business leader in ASEAN in 2015.”

Viglacera is planning to sell 10-20 per cent of its equity to each of three foreign strategic investors over the next five years.

“SCG is conducting several important projects in Vietnam following our acquisition of an 85 per cent stake of Vietnam’s Prime Group Joint Stock Company in December 2012,” Chalrmchai said.

“We are interested in all M&A opportunities in the country, where demand is spiking,” he noted.

SCG officials said the acquisition of Prime would not only help SCG amplify its presence in Vietnam’s building materials market, but would empower the group to become one of the world’s largest ceramic tiles producers, with a capacity of 225 million square metres per year, further enhancing its position in ASEAN.

In the first quarter this year, SCG Vietnam raked in revenues of $133 million, up 76 per cent on-year, mainly thanks to consolidated revenue from Prime which currently runs six factories producing 75 million square metres of ceramic tiles per year and has 24 subsidiaries and partnerships.

This year SCG said it planned to launch many new products and technologies in the country such as root tiles and fibre-cement boards, COTTO bathroom products and Italian ceramics, SCG HEIM, Winsor shading system, vinyl ad solareco systems, said Nopporn Keeratibunharn, SCG’s sales and marketing director.

Notably, another of SCG’s potential new products is The NEST, a sustainable home for the future which produces more energy than it consumes. It is designed around a tropical environment and combines smart, eco and care technology to adapt to living trends of the modern world.

“We have witnessed tremendous growth and changes in the business landscape as well as socio-political aspects here in Vietnam,” said SCG Vietnam’s managing director Niwat Korman. “Right now, with an emerging economy, large, young and dynamic population, favourable business environment, and upcoming ASEAN Economic Community, Vietnam definitely has advantages that inspire our continued commitment to making it our strategic market.”

SCG is also seeking other investment opportunities in Vietnam, including taking part in a petroleum complex capitalized at $4.5 billion.

Specifically, SCG and Thai Plastics and Chemicals (TPC) signed a joint venture agreement with QPI Vietnam, PetroVietnam and Vinachem nearly two years ago. SCG holds a 28 per cent stake in the company and TPC 18 per cent. The remainder is allocated to the other strategic partners.

In the first quarter this year SCG Vietnam reported $615 million in total assets with 19 operations employing more than 6,500 local employees.

As one of the leading conglomerates in ASEAN, SCG was established in 1913 and has diversified into three core business units including SCG Chemicals, SCG Paper and SCG Cement-Building Materials. As of March 31, its total assets totalled nearly $14.1 billion with $2.52 billion within ASEAN.