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|SCG Packaging is one of the leading packaging businesses in Thailand (Photo: Komchadluek)|
Bangkok – Thailand’s SCG Packaging (SCGP) is joining hands with its Vietnamese partners under an investment worth 10 billion THB (334 million USD) to expand its packaging solution business in Vietnam, where demand for packaging products is growing.
The latest move is the signing of a share purchase agreement on February 9 to acquire a 70 percent stake in the Duy Tan Plastics Manufacturing Corporation, Vietnam's top producer of rigid plastic packaging products, according to its letter sent to the Stock Exchange of Thailand.
The purchase will be made through the SCGP's wholly-owned subsidiary and further transaction details will be provided in the middle of this year.
SCGP chief executive Wichan Jitpukdee said SCGP has constantly increased investment in Vietnam, which has yielded a revenue growth of more than 10 percent annually.
"SCGP is prepared to work with all partners to share experience and knowledge in the development of integrated packaging solutions and support the growing demand for diverse types of packaging among customers in ASEAN," Wichan was quoted by the Bangkok Post as saying.
Duy Tan operates business-to-business sales to multinational companies and local brand owners of consumer and fast-moving consumer goods. The company also manufactures household plastic containers under the brand name "Duy Tan," with a capacity of 116,000 tonnes per year, the paper said.
The 10 billion baht is part of 20-billion-baht investment budget the SCGP announced last month for business expansion and merger and acquisition plans.
Earlier in 2009, the SCGP established Vina Kraft Paper in the Vietnamese southern province of Binh Duong to produce packaging paper, with total production capacity of 500,000 tonnes per year.
In 2015 the company invested in the Tin Thanh Packing Joint Stock Company (BATICO), one of the five largest flexible packaging producers in Vietnam.
The company also acquired 94.11 percent stake in the Bien Hoa Packaging Joint Stock Company (SOVI), a producer of corrugated paper and offset laminated packaging in Vietnam, with an annual total capacity of 100,000 tonnes.
According to Wichan, all three projects expand SCGP's production base for downstream products in Vietnam and are expected to contribute sales of an additional 8.5 billion baht per year.
The SCGP is also seeking opportunities for business expansion in paper production capacity in northern Vietnam to serve demand within the country.