SCG Packaging Public Company Limited (SET: SCGP) announced on Tuesday that its board of director has approved the investment project to acquire 70% stake in ordinary shares of Starprint Vietnam JSC (SPV), an eminent offset folding carton packaging manufacturer in Vietnam for a total enterprise value of not exceeding 1,050 billion Dong or approximately 1,534 million Baht.
This merger & partnership (M&P) will be carried out through strategic partnership with Starflex Public Company Limited (Starflex), a leading flexible packaging manufacturer based in Thailand, who plans to hold a 25% stake in SPV. This transaction is proceeding under the standard M&P procedures and expected to be completed in Q3/2023.
SPV is one of Vietnam’s leading producers of offset folding cartons, rigid boxes and luxury packaging with distinctive printing capability and quality. It has a prominent client base and long-term track record of commercial relationship with renowned multinational and national companies with portfolio that is highly linked to high growth & fast moving consumer products.
In the FY2022, SPV recorded revenue of 1,013 billion Dong (approximately 1,480 million Baht), net profit after tax of 92.5 billion Dong (approximately 135 million Baht), and assets of 440 billion Dong (approximately 643 million Baht). SPV has a combined capacity of 16,500 tons of offset printing per year and 8 million pieces of rigid boxes per year, with two manufacturing facilities located in Long Binh (Amata) Industrial Zone, Dong Nai in southern Vietnam.
Starflex, a listed company in SET, is one of the industry leaders in manufacturing and distributing high quality flexible packaging that meets international standards, with long term expertise and operation since 2003. Starflex offers a diversified product range that mainly covers high growth segments, such as food and homecare, to trusted multinational and local clients with excellent recognition on product development and design.
This transaction emphasizes SCGP’s commitment to serve Vietnam’s surging packaging consumption. The addition of attractive offset & rigid boxes with premium quality and margin into SCGP’s total packaging solutions portfolio would ultimately enhance the Company’s capability to serve enlarging needs of customers related to branding and marketing activities. This is also aligned with the evolving consumer behaviors toward receiving better experience through high quality packaging with emphasis on aesthetic display.
In addition to the strengthening of SCGP’s position as leading integrated consumer packaging solutions provider and the doubling of market share in offset folding carton in Vietnam, this M&P would enable the synergy with other SCGP’s subsidiaries in the country in the form of cross-selling opportunity and customer portfolio enhancement. The ability to expand MNC customer base would also allow SCGP to directly engage in more collaborative projects on new product development for innovative and sustainable packaging solutions in Vietnam and ASEAN going forward.
SCGP is committed to fulfilling and facilitating the increasing preference for sustainable packaging through products ranging from fiber packaging, consumer and performance packaging, and other outstanding solutions. Currently, the Company operates over 50 facilities across Thailand, Vietnam, Indonesia, the Philippines, Malaysia, the United Kingdom, Spain, the Netherlands, and USA. SCGP is listed on the Stock Exchange of Thailand and has a current market capitalization of approximately $5.3 billion (180,000 million Baht).
