SET-listed TPBI Plc, a maker of plastic bags and film, has acquired a 25% stake in Taiwan-based Minima Technology Co worth nearly 200 million baht, according to TPBI chief executive Somsak Borrisuttanakul.
TPBI bought the 25% stake through a subsidiary, TPBI International Co, which signed a memorandum of understanding yesterday in Taipei.
Under the terms, TPBI International will subscribe to newly issued shares of Minima Technology, bringing its holding from 2.7% to 19% and then 25% within a year of the initial subscription.
Mr Somsak said the deal would let the company engage in production and sales of high-value-added (HVA) products using 100% biodegradable plastic, such as plastic bags, cutlery and paper cups, in Taiwan, Australia, the US and countries in Europe.
Minima also conducts R&D of 100% biodegradable plastics and holds various patents in Taiwan, the US and China.
Mr Somsak said the move to acquire shares in Minima was part of a plan to diversify business into 100% biodegradable plastic, aligning with the global trend of environmental sustainability.
Minima has a strong network and expertise in the business and can help increase long-term revenues for TPBI from the sales of raw materials and 100% biodegradable plastic products, Mr Somsak said.
"This would help us gain a competitive edge in the market by developing new products through extensive research and development of 100% biodegradable plastic," he said.
Minima is regarded as a strong brand among polylactic acid polymer products that offer high resistance to heat.
"This will be the faster way for us to diversify business into a highly competitive market for film and plastic products," Mr Somsak said.
Last month, TPBI announced a switch to HVA products amid declining demand for general plastic in export market.
With escalating competition, TPBI expects flat revenue and profit this year because of falling demand in major markets like the US and Europe.
TPBI shares closed yesterday on the Stock Exchange of Thailand at 13 baht, unchanged, in trade worth 1.2 million baht.