SCG Packaging Public Company Limited (SET: SCGP) has announced the merger and partnership (M&P) in VEM (Thailand) via the Stock Exchange of Thailand (SET).
SCGP Solutions (Singapore) Pte. Ltd. (SCGPSS), a wholly owned subsidiary of SCGP, had completed the acquisition of 90% stake in VEM (THAILAND) CO., LTD. (VEM-TH), a manufacturer of high-performance polymer injection molding parts. The total investment for the 90% stake shall not exceed USD 4.0 million (approximately THB 146.2 million). VEM-TH’s financial performance will be consolidated from July 2024 onward.
This merger and partnership (M&P) is part of SCGP’s strategic direction to enhance and grow healthcare packaging and supplies business driven by trends in aging society, rising awareness in healthcare and wellness. VEM-TH, based in Rayong, Thailand, specializes in serving fast-growing clients in medical, aircraft, electrical parts and automotive industries, with various market coverage including Thailand, USA, China and other countries. The M&P in VEM-TH provides SCGP with access to a quality management system for medical devices (ISO 13485) and certified cleanrooms class 8 and class 7 through intricate and delicate processes at every stage, including the development of customized mold. This would also enable SCGP to elevate the production capability to produce this type of products in Thailand in addition to production from Deltalab S.L. and Bicappa Lab S.r.L in Spain and Italy respectively, while fulfilling surging demands in South East Asia.
The synergistic collaboration with the existing owner of VEM-TH on manufacturing, sales and marketing will help expand international customer coverage and network. Currently, VEM-TH poses capacity of 30 production lines which can produce over 59 million pieces of premium quality product per year. In 2023, VEM-TH recorded revenue of approximately THB 302 million and had assets of THB 455 million at the end of 2023.
SCGP is committed to our long-term purpose of growing people and business for a better planet through offering of innovative and sustainable products ranging from fiber packaging, consumer and performance packaging, healthcare packaging and supplies, and other solutions. SCGP is ready to be a partner in supporting the growth of healthcare packaging and supplies business in alignment with its strategic initiatives.
The acquisition of a new subsidiary in VEM-TH would be equal to 0.06% of total assets stated in SCGP consolidated financial statements as of March 31, 2024, and when combined with those in the past six months before the date of this transaction, the total size is 0.66%. Thus, the investment disclosure is not required under the disclosure rule for the acquisition and disposition of assets. This transaction is not a connected transaction.
