Nawaplastic to boost holdings in Binh Minh Plastic to 50 per cent

Nawaplastic and SCG aim to take control over the Vietnamese construction materials market

On March 2, the Ho Chi Minh City Stock Exchange (HSX) announced that it received the application to buy BMP’s offered shares. If the deal is successful, Nawaplastic will increase its holding in BMP to 49.91 per cent from the existing 20.4 per cent.

Previously, BMP announced that it will put 24.16 million shares (29.51 per cent) owned by State Capital Investment Corporation (SCIC) on sale via an auction.

The auction is expected to be organised on March 9 at the HSX with the starting price of VND96,500 ($4.24). All organisations and individuals satisfying BMP’s conditions can join.

Thereby, at the above initial price, Nawaplastic will spend at least VND2.32 trillion ($101.94 million) acquiring the offered stake.

Previously, Navaplastic announced intentions to drop Tien Phong Plastic to increasing holdings in BMP in September 2017.

At the time, Nawaplastic’s announcement came as a surprise because both Binh Minh Plastic and Tien Phong Plastic approved lifting the foreign ownership limit (FOL) to 100 per cent.

Furthermore, the Thai firm earned a large profit from its investments in the two Vietnamese companies. Both Nawaplastic and Tien Phong Plastic refused to comment on this decision.

According to Robert Tran, general director of Robenny Strategic Consulting Group in the Asia-Pacific region and the US, the decision may have come from an internal conflict in the board of directors.

Notably, in early July this year, Tien Phong Plastic, through its subsidiary Southern Tien Phong Plastic, struck a share sale agreement with Japanese Sekisui Chemical Company Limited.

The deal made Nawaplastic unhappy because at the time, they intended to buy more of State Capital Investment Corporation (SCIC)’s stake in Tien Phong Plastic to seize controlling rights.

Nawaplastic, a wholly-owned subsidiary of Thai Plastic and Chemicals PCL (TPC), specialises in manufacturing and distributing PVC plastic.

TPC, which is a 90 per cent owned subsidiary of SCG, currently holds 50 per cent of the Thai plastics market, while simultaneously owning numerous plastic manufacturing companies in Vietnam, including Chemteck Co., Ltd. (100 per cent), Viet-Thai Plastchem Co., Ltd. (72.49 per cent), and TPC Vina Plastic and Chemicals Corporation Limited (70 per cent).

Through the acquisition in BMP and Tien Phong Plastic, Nawaplastic would seize their advantages in manufacturing and distribution systems as well as their brands to realise SCG and Nawaplastic’s target to control the construction materials market in Vietnam.