Thailand’s major packaging company, SCG Packaging (SCGP) is joining hands with its Vietnamese partners under an investment worth Bt 10 billion (US$334 million) to expand its packaging solution business in Vietnam, where demand for packaging products is growing.
The latest move involves the signing of a share purchase agreement in February to acquire a 70% stake in the Duy Tan Plastics Manufacturing Corporation, Vietnam’s top producer of rigid plastic packaging products. The purchase will be made through the SCGP’s wholly-owned subsidiary and further transaction details will be provided in the middle of 2021.
According to SCGP Chief Executive, Wichan Jitpukdee, Vietnam market generated an annual revenue growth of 10% for the company and it has been constantly raising its investment there.
Wichan said, “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.”
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.
This investment represents half of the Bt 20 billion (US$668 million) which SCGP has allocated recently for business expansion and M&A activities.
SCGP had committed numerous investments in the country. 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 annually. In 2015, the company invested in the Tin Thanh Packing JSC (BATICO), one of the 5 largest flexible packaging producers in Vietnam.
The company had also acquired 94.11% stake in the Bien Hoa Packaging JSC (SOVI), a producer of corrugated paper and offset laminated packaging in Vietnam, with an annual total capacity of 100,000 tonnes.
SCGP is also seeking opportunities for business expansion in paper production capacity in northern Vietnam to serve demand within the country.