Foreign packaging enterprises increase presense in VN via M&A
Foreign packaging enterprises increase presense in VN via M&A
Multiple foreign enterprises have acquired large packaging companies in Việt Nam, with the ambition to expand their presence in the country.
Inside a factory of Tín Thành Packaging Joint Stock Company (Batico). In 2015, TC plastic packaging company - a member company of SCG group - successfully acquired 80 per cent of the shares of Batico. — Photo Batico.com |
Thai giant SCG Group is one of the leading businesses in Southeast Asia. The Group is also among the earliest foreign investors with a presence in Việt Nam, right after the revised Foreign Investment Law took effect in 1992.
Compared to businesses from Europe, Korea, and Japan, Thai corporations are considered to have some advantages, such as geographical location and cultural similarities. To date, SCG Group manages more than 20 subsidiaries in Việt Nam, focusing on three main business segments: Cement - Building Materials, Chemicals and Packaging.
As for the packaging segment, SCG has been present for more than a decade and has accelerated since the second half of 2020. This group started with joint ventures but then expanded faster with mergers and acquisitions.
SCG's most famous M&A deals in the packaging industry include the acquisition of 80 per cent of Tín Thành Packaging, 94 per cent of Biên Hòa Packaging or 70 per cent of Duy Tân Plastics.
In 2015, TC plastic packaging company - a member company of SCG group - successfully acquired 80 per cent of the shares of Tín Thành Packaging Joint Stock Company (Batico).
The deal value, as well as Batico's production information, were not announced by SCG. Batico is a large soft plastic packaging manufacturing enterprise in Việt Nam with about 20 years of experience.
In December 2020, TCG Solutions Pte Ltd, a member company of SCG Group, successfully purchased 12.1 million shares of Biên Hòa Packaging Joint Stock Company and owned 94.11 per cent of this company's charter capital.
The deal value was approximately VNĐ2.1 trillion.
Biên Hòa Packaging Company is one of the five largest packaging suppliers in the southern region, specialising in providing packaging for Unilever, Pepsico, and Nestle. This enterprise has three affiliated factories, a capacity of 100,000 tonnes per year, continuously achieving average growth of 20-25 per cent per year.
On February 9, 2021, SCG announced the purchase of 70 per cent shares of Duy Tân Plastic.
Duy Tân Plastic is one of the leading enterprises in the Vietnamese market for rigid plastic packaging products, with main customers being multinational companies and domestic FMCG businesses. Roughly 80 per cent of Duy Tân’s products are sold in Việt Nam, 20 per cent are exported to the US and other markets.
In 2020, Duy Tân Plastics achieved revenue of VNĐ4.7 trillion (equivalent to 6.1 billion baht), with total assets by the end of the year reaching VNĐ5 trillion (6.5 billion baht). The annual capacity of this business is 116,000 tonnes of rigid plastic packaging and household plastic products.
Nguyễn Văn Dòng, chairman of the Printing Association, said that recently there has been a phenomenon of printing and packaging businesses from Asian countries looking for investment and business opportunities in Việt Nam.
The demand for printing and packaging will increase as industrial production increases. This is an opportunity but also puts great pressure on the competitiveness of Vietnamese businesses operating in the industry, Dòng said.
According to Dòng, foreign businesses will invest in production in Việt Nam, even buying a majority of shares in domestic businesses to take advantage of available factories, technology and skilled labor force to quickly participate in the market.
