Thailand’s Siam Cement Group (SCG), through its subsidiary TC Flexible Packaging Company Limited, has acquired an 80 per cent stake in Vietnam-based Tin Thanh Packing Joint Stock Company (Batico), the Thai group has announced.
While the group did not reveal the value of the deal, the Bangkok Post earlier in July reported that SCG had paid 1.5 billion baht ($42.8 million) to take over Batico.
SCG has been actively expanding its packaging business portfolio in Vietnam. Given the industry potential with six per cent annual growth, the latest investment is anticipated to strengthen its position as a leading packaging solutions provider in the ASEAN, with two flexible packaging factories in Thailand and two in Vietnam.
Meanwhile, Batico is among Vietnam’s five largest packaging producers, making 230 million square metres of packaging per year. In 2014, it generated around $41 million in revenue.
SCG began its regional expansion with Vietnam as its strategic hub in 1992. Currently, the Thai group has 22 operations in Vietnam with more than $716 million worth of total assets, which represents an increase of 16 per cent year-on-year. It employs more than 6,500 locals and is actively looking for opportunities in the country, particularly a petrochemical complex project in the south, which is planned with a $4.5 billion investment.
Meanwhile, the group’s recent acquisition of 85 per cent in Prime Group, a local building material producer, has made them world’s largest ceramic tile maker.
SCG’s operation in ASEAN (excluding Thailand) in the second quarter saw the revenue from sales amount to $330 million, equal to 10 per cent of SCG’s total revenue.
As of June 30, the group’s total assets reached $14.83 billion, while ASEAN operation (excluding Thailand) accounted for 19 per cent.
In Vietnam, the company reported Q2 revenue at VND3.48 trillion ($157 million), which is generally stable compared to the previous year.
Accumulated for the first half, the revenue of the Vietnam unit stood at almost VND6.34 trillion ($288 million), a year-on-year increase of three per cent.
“For ASEAN markets, SCG found that in the second quarter, demand in cement continued to rise, especially in Myanmar and Cambodia, where demand rose by 19 per cent and 12 per cent y-o-y respectively, as SCG’s cement is a popular choice and highly regarded for its quality. SCG’s investments in ASEAN will continue to push ahead as planned,” said Kan Trakulhoon, president and CEO of the group.
SCG is also expanding in the lower Mekong region, as the cement plant in Cambodia has begun its second operation line, while construction of the production base in Myanmar will be completed in 2016. In Laos, the SCG’s plant will be finished in 2017, while operation at the Indonesia-based plant will commence by the end of this year, ready for the expected increase in demand of ASEAN consumers.