SCG Packaging Plc (SCGP) is acquiring a 70% share in Starprint Vietnam JSC (SPV) for 1.53 billion baht to take advantage of positive prospects in Vietnam.
The asset acquisition is expected to be completed in the third quarter this year, supporting product sales, including offset folding cartons, rigid boxes and luxury packaging products.
"SCGP will continue to expand its business into markets with good business opportunities and Vietnam is a high-potential market with growing demand for packaging products," said Wichan Jitpukdee, chief executive of SCGP.
SPV has a prominent client base and long-term track record of commercial relationships with renowned multinational and national companies, boasting a portfolio linked to high growth and fast-moving consumer products, he said.
SPV has a combined capacity for 16,500 tonnes of offset printing a 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.
In fiscal 2022, SPV recorded 1.48 billion baht in revenue, net profit after tax of 135 million baht, with assets worth 643 million baht.
SCGP expects to spend an investment budget of around 18 billion baht in 2023, with 50% allocated to merger and partnership projects. The remainder will support business expansion and maintenance projects.
The company said Thailand and Asean are contributing to demand growth for packaging products as the tourism industry recovers following the easing of the pandemic.
Mr Wichan said higher electricity bills are not seriously affecting SCGP because the company shifted to clean energy. Renewable energy such as solar power makes up 75% of the firm's usage, with 25% coming from the state power grid.
In the first quarter this year, SCGP reported revenue gained 1% quarter-on-quarter to 33.7 billion baht, while profit increased 171% to 1.22 billion for the period. The company plans to revise its revenue target for the second quarter because of an uncertain global economy, especially sluggish US and European markets.