News

23 July 2021

SCGP forms a partnership with Duy Tan in Vietnam To diversify packaging products and meet demands in ASEAN

SCGP forms a partnership with Duy Tan in Vietnam To diversify packaging products and meet demands in ASEAN

SCGP is enlarging its investment in Vietnam, by entering into a merger and partnership deal, taking over 70% of Duy Tan, Vietnams leading producer of rigid plastic packaging products, in order to diversify and integrate production capabilities in response to market growth domestically and in the ASEAN region.

Mr. Wichan Jitpukdee, Chief Executive Officer, SCG Packaging Public Company Limited, SCGP reports that SCGP has continuously increased investment in Vietnam during the past decade, integrating businesses dealing in packaging paper, fiber-based packaging, and flexible packaging with the aim at meeting demands of customers and consumers in Vietnam and the ASEAN region, which are witnessing sustained growth, and jointly developing products with an eye toward expanding the Vietnamese and export markets.

In the latest investment, on July 23, 2021, SCGP has announced the completion of of its 70% merger and partnership (M&P) investment in Duy Tan Plastics Manufacturing Corporation (Duy Tan), Vietnam’s leading producer of rigid plastic packaging products, which follows the previous disclosure to the Stock Exchange of Thailand on February 9, 2021.

Payment for the 70% M&P stake is the immediate 3,630 billion VND (approximately 5,170 million Baht), followed by the second payment which will be based on Duy Tan’s incremental financial performance for FY2020 and FY2021, and when combined with the first payment will be no more than the total of 6,400 billion VND (approximately 9,120 million Baht). This transaction is through SCGP Rigid Packaging Solutions Pte. Ltd. (“SCGPRS”), which is a wholly owned subsidiary of SCGP. Duy Tan’s financial performance will be consolidated from August 2021 onward.

Duy Tan is Vietnam’s leading producer of rigid plastic packaging products with five manufacturing facilities.     Its B2B clients are multinational companies and local consumer goods producers of leading brands in Vietnam while B2C clients are provided with home products under Duy Tan brand, such as food wares and containers which are distributed widely within Vietnam through over 16,000 retail outlets, wholesalers and supermarkets.

On a last twelve months basis (Q3/2020 – Q2/2021), Duy Tan recorded revenue of approximately 5,025 billion VND (approximately 7,170 million Baht), net profit after tax of approximately 650 billion VND (approximately 930 million Baht) and had assets of approximately 5,000 billion VND (approximately 7,130 million Baht).

“This acquisition will enable SCGP to  provide a complete line of packaging products and expertise to better meet specific needs of consumers. In addition, it helps  leveraging technological operational strength and resource pooling across operations,” Mr. Wichan says.

“Moreover, this transaction affirms SCGP’s commitment to contribute to the economic growth and the development of plastic industry in Vietnam.”