Thai industrial conglomerate Siam Cement Group (SCG) has acquired a 55 per cent stake in Indonesia-listed paper packaging firm PT Fajar Surya Wisesa Tbk (Fajar) for 9.6 trillion rupiah ($665 million), according to a statement on Friday.
The investment is expected to help foster the growth of SCG’s packaging business in the long run as Fajar has built a production capacity to serve the Indonesian market, which is almost three times the size of Thailand.
“The major shareholding in Fajar will allow SCG to enhance its ASEAN growth, especially in Indonesia that provides tremendous future growth opportunity for packaging business,” said SCG’s president and CEO Roongrote Rangsiyopash.
The transaction is expected to be completed in the third quarter of this year. The company will fund the acquisition through internal accruals, he said.
He added that SCG is in the process of exploring the feasibility of raising equity at the SCG Packaging level. This process is expected to be completed by the end of 2019.
SCG’s packaging business reported sales revenue of 87.26 billion baht ($2.76 billion) and a profit of 6.32 billion baht ($200.27 million) in the fiscal year 2018. Meanwhile, Fajar registered sales revenue of 9.94 trillion rupiah ($693.98 million) and clocked profit of 1.41 trillion rupiah ($98.23 million).