SET-listed tapioca products manufacturer Thai Wah Plc is in discussions to acquire two production plants in Thailand and Vietnam at a total investment of about 1 billion baht ($30 million).
The talks are expected to be sealed this year and the company plans to fund the acquisitions with cash reserves, said its chief executive officer Ho Ren Hua.
“The tapioca business has picked up following the continuous growth of food business and high demand from China,” he said. “The acquisitions are in line with our strategies to focus more on high-value products and make better margins.”
China and Taiwan make up for about 57 per cent of the company’s export while other markets include Malaysia, Japan, Indonesia and the United States.
It claims an 8.4 per cent market share in China’s tapioca starch industry and 18.6 per cent in Taiwan.
Currently, it is also building a starch noodle production plant with an annual capacity of 30,000 tonnes in Cambodia and a vermicelli manufacturing plant with an annual capacity of 3,000 tonnes in Vietnam. Both are scheduled to start the operations next year.
He believes that the sales of tapioca starch in the second half will be around 10 per cent higher than the first six months despite being affected by baht depreciation.
The market price for tapioca starch has surged from $315 per tonne to $345 at present, he added.