VietNamNet Bridge – Siam Cement Public Company Limited (SCG) has acquired Batico, a large packaging company in Vietnam. Many people are not aware that SCG is the name behind a number of large acquisitions in Vietnam.

Who is SCG?

The acquisition of Prime Group not only helped strengthen the presence of SCG in Vietnam, but also helped this group become the largest manufacturer of floor tiles in the world.

Founded by King Rama VI in 1913, SCG was originally tasked to support infrastructure development in Thailand. Over more than a century of development, SCG has become one of the biggest corporations in ASEAN. In 2011, Forbes ranked SGC as the second largest company in Thailand and the 620th largest in the world.

According to a report from SCG, as of June 30, 2015, its total assets reached $14.83 billion, including $2.841 billion in Southeast Asia (excluding Thailand), accounting for 19% of total consolidated assets of SCG.

This group operates in many fields, focusing on three main areas: petrochemicals, packaging and cement-building materials. SCG has over 200 subsidiaries and more than 51,000 employees.

Buying Vietnamese firms

SCG started to expand operations into Vietnam as a strategic country in 1992. So far, this group has conducted more than 20 acquisition and merger affairs, including cases worth up to a few hundreds of million dollars. One of the largest deals is the acquisition of the Prime Group.

The acquisition of Prime Group not only helped strengthen the presence of SCG in Vietnam, but also helped this group become the largest manufacturer of floor tiles in the world.

In December 2012, SCG signed an agreement to buy 85% stake in Prime Group for approximately $240 million. With 6 tile manufacturing plants with a capacity of 75 million m2 a year, Prime Group is the world’s fifth largest manufacturer of floor tiles in the world, and the leading manufacturer of building materials in Vietnam (accounting for 20% market share).

Prime Group also has a wide distribution network, strong business structure and firm operations strategy.

The acquisition of Prime Group turns SCG into the largest manufacturer of floor tiles in the world, with a record output of 225 million m2/year.

Through a subsidiary named Nawaplastic Industries (Saraburi) Co., Ltd., SCG purchased 20.4% of shares of Binh Minh Plastics JSC (BMP) and 23.84% of shares of Tien Phong Plastics JSC (NTP). BMP and NTP currently account for 50% of the construction plastic pipe market of Vietnam. By acquiring these businesses, SCG will easily achieve its goal of dominating construction plastic in Vietnam.

Most recently, through its subsidiary TC Flexible Packaging (TCFP), SCG has completed the acquisition of a 80% stake in Tin Thanh Plastic Packaging Company (Batico), at the price of $44.4 million.

Batico is among the top five largest enterprises in Vietnam in the field of packaging production, with a capacity of 230 million m2/year. With the acquisition of this company, SCG has increased the number of soft plastic packaging factories to four, including two in Vietnam.

Mr. Kan Trakulhoon, Chairman and CEO of SCG, said this group has expanded packaging production and business in Vietnam in recent years because it realizes the potential of the market in Vietnam, with an expected growth rate of approximately 6% per year.

In addition to these four businesses, SCG also holds shares in 18 other enterprises in Vietnam such as Viet - Thai Plastchem JV. TPC Vina Plastic and Chemicals Ltd, Chemtech, Minh thai Plastic Materials Ltd., Vina Kraft Paper Co., Ltd., TanA Industries, Ltd. AP Packaging Company, Ltd., Alcamax (Vietnam) Packaging Co., Ltd. Packamex Packaging (Vietnam), ...

Will it continue to acquire more Vietnamese firms?

In late 2013, SCG leaders approved the investment plan in the next 5 years, with $6-$8 billion to be invested in countries in the region, in which a large part will be poured into Vietnam.

Photo: Mr. Kan Trakulhoon - Chairman and CEO of SCG.

In an interview, Kan Trakulhoon confirmed that the priority in SCG’s investment policy in Vietnam is acquisition, because this strategy can help this group get quick access to the local.

Thus, in a few years, the market may witness more Vietnamese enterprises operating in the industries such as cement - building materials, paper and chemicals being acquired by this Thai "giant".

Bizlive/VNN