PULP & PAPER

Siam Cement Group (SCG), Thailand's top industrial conglomerate, has forged a joint venture with Japan's Nippon Paper Industries (NPI) to set up Siam Nippon Industrial Paper Co (SNP) to offer value-added products.

SCG subsidiary SCG Paper's deal with NPI and NP Trading, both subsidiaries of Nippon Paper Group (NPG), is for a new machine-glazed paper project worth an estimated 2.2 billion baht.

SCG Paper will hold a 45% stake in the joint venture, while SNP and two units of Nippon Paper will hold a combined 55%, said Chaovalit Ekabut, SCG's chief financial officer and vice-president for finance and investment.

The paper plant will be located in Ratchaburi's Ban Pong district and have annual capacity of 43,000 tonnes, with operations likely by mid-2014.

Machine-glazed paper is a specialty product with a high-gloss finish and unique basis weight (20-80 grammes).

It is used primarily in hygienic packaging with applications in the food and medical industry.

SCG Paper is a core SCG business, with operations across Asean and products comprising of pulp, printing and writing paper, packaging paper and corrugated cartons.

NPG is a leading paper producer in Japan. Its main businesses cover a wide range of paper operations, as well as trading activities globally.

SCG Paper achieved 54.8 billion baht in sales revenue last year, up by 6% from 2010, for a net profit of 3.33 billion, down by 5%.

The company wants to be a leader in Asean paper and packaging, with extensive investments in the Philippines, Vietnam, Malaysia, and Singapore.

Last year, it acquired Alcamax Packaging (Vietnam) Co, the leading corrugated container producer in that country.

This acquisition makes SCG Paper third in corrugated production capacity for Vietnam.