VietNamNet Bridge - At least $5-6 billion is the budget Thai SCG plans to spend on merger & acquisition (M&A) deals in Vietnam from now to 2020.

A lot of merger & acquisition (M&A) deals in the plastics sector have been completed recently, while some more are being planned.

Tin Thanh Plastics, one of the five biggest plastic packaging enterprises, unexpectedly sold 80 percent of its stake to SCG last year at $44.4 million.

Analysts said Tin Thanh is a big manufacturer in Vietnam. It now has a lot of big customers such as Nestlé, Bayer, Dupont, C.P, Walmart, Trung Nguyen and Vinamit, which can bring stable profits. However, it decided to sell to a foreign investor amid  increasingly stiff competition in the market.

As for SCG, this is be the best way for it to expand production and cement its position in the South East Asian market.

A lot of merger & acquisition (M&A) deals in the plastics sector have been completed recently, while some more are being planned.

Not only taking over Tin Thanh, SCG has been trying other ways to penetrate deeply into the Vietnam’s plastic industry. It bought 20 percent of stake of Binh Minh Plastics and 25 percent of stake of Tien Phong Plastics, the two companies which hold 50 percent of the market share.

The analysts commented that if SCG can obtain higher ownership ratios in Binh Minh and Tien Phong, the group will control the structural plastics industry in Vietnam.

To date, SCG has spent $121 million to invest in seven Vietnamese plastics companies. Besides the companies, SCG also holds shares of Vietnam-Thailand Plastchem, TPC Vina, Chemtech and Minh Thai Plastic Material Company.

It also injected money into Kraft Vina, Tan A Industry, AP Packaging, Alcamax and Packamex – packaging companies.

The Vietnamese plastics market has also been eyed by South Korean and Japanese investors.

Japanese Oji Holding Corporation, for example, has bought United, while Sagasiki Vietnam bought Goldsun, a printing and packaging firm. 

Most recently, RISA Partners, a Japanese investment institution, has shown its intention to invest in Dong A Plastics.

Meanwhile, Tan Tien Plastic Packaging, a listed company, surprised the Vietnam plastics industry as it fell into South Korean hands. 

Tan Tien’s CEO Le Minh Cuong found that a large amount of the company’s shares were going to the pockets of a South Korean investor.

Cuong then hurried to mobilize all possible financial sources in an effort to raise his ownership ratio in Tan Tien. However, it was too late. Cuong now holds 23.67 percent of the company’s shares, while the ‘South Korean hunter’ now holds the controlling stake.

The golden age of Tan Tien was in 2011 and before, when its turnover was VND1 trillion and the profit was VND85 billion. After acquiring Tan Tien, the investor from South Korea is restructuring the enterprise.


NCDT