Thai conglomerate Siam Cement Group started off in Vietnam with joint ventures and tie-ups, but for expansion subsequently it resorted to mergers and acquisitions.
SCG Packaging Public Company Ltd (SCGP), its subsidiary, recently signed an agreement to buy 70 percent of Duy Tan Plastics, the largest manufacturer of rigid plastic packaging products in Vietnam.
The parent, SCG, now owns eight Vietnamese packaging companies. Aside from the newly acquired Duy Tan Plastics, the total revenue of SCG’s packaging companies in 2019 was over VND10 trillion ($434.7 million).
It is one of the largest firms in Southeast Asia and among the first to invest in Vietnam after the Law on Foreign Investment was amended in 1992.
Compared to companies from Europe, South Korea and Japan, those from Thailand have a geographical advantage while the two countries’ cultures are similar.
SCG now has over 20 subsidiaries in Vietnam in the cement and building materials, chemicals and packaging industries. It has been investing in the packaging industry for over a decade.
In December last year, another subsidiary, TCG Solutions, acquired a 94 percent stake in Bien Hoa Packaging, the first producer of corrugated paper and offset-laminated packaging in Vietnam.
SCG also owns Vina Kraft Paper, the country’s largest paper packaging manufacturer, Tin Thanh Packing JSC, one of the five largest flexible packaging producers, carton box makers New Asia Industry, AP Packaging Hanoi and Alcamax Packaging Vietnam, and flexible packaging company Packamex Vietnam.
Vina Kraft Paper, Duy Tan Plastics and Bien Hoa Packaging reported revenues of VND6 trillion, VND4.4 trillion and VND1.7 trillion in 2019.
SCG’s acquisitions have resulted in foreign firms dominating the country’s packaging industry.
According to a note on the industry by brokerage FPTS Securities, the majority of large firms are foreign-owned.
The top paper packaging companies are Japan’s Ojitex and Tohoku, Taiwan’s Yuen Foong Yu and Viet Long Packaging and Thailand’s Alcamax and New Asia Industry, while plastic packaging is dominated by South Korea’s Tan Tien Plastic Packaging JSC and J.S Plastic Packaging, Taiwan’s Tong Yuan Packaging and Finland’s Huhtamaki Flexible Packaging Vietnam.
Reported by Minh Son, @Vnexpress