MOSCOW (MRC) -- A lot of merger & acquisition (M&A) deals in the plastics sector in Vietnam have been completed recently, while some more are being planned, as per GV.
Tin Thanh Plastics, one of the five biggest plastic packaging enterprises, unexpectedly sold 80 percent of its stake to Siam Cement Group (SCG) last year (2015) at USD 44.4 million. Analysts said Tin Thanh is a big manufacturer in Vietnam. It now has a lot of big customers such as Nestle, Bayer, Dupont, C.P, Walmart, Trung Nguyen and Vinamit, which can bring stable profits. However, it decided to sell to a foreign investor amid increasingly stiff competition in the market.
As for SCG, this is the best way for it to expand production and cement its position in the South East Asian market. Not only taking over Tin Thanh, SCG has been trying other ways to penetrate deeply into the Vietnam’s plastic industry. It bought 20 percent of stake of Binh Minh Plastics and 25 percent of stake of Tien Phong Plastics, the two companies which hold 50 percent of the market share.
Analysts commented that if SCG can obtain higher ownership ratios in Binh Minh and Tien Phong, the group will control the structural plastics industry in Vietnam. To date, SCG has spent USD 121 million to invest in seven Vietnamese plastics companies. Besides the companies, SCG also holds shares of Vietnam-Thailand Plastchem, TPC Vina, Chemtech and Minh Thai Plastic Material Company. It also injected money into Kraft Vina, Tan A Industry, AP Packaging, Alcamax and Packamex - packaging companies.
The Vietnamese plastics market has also been eyed by South Korean and Japanese investors. Japanese Oji Holding Corporation, for example, has bought United, while Sagasiki Vietnam bought Goldsun, a printing and packaging firm.
Most recently, RISA Partners, a Japanese investment institution, has shown its intention to invest in Dong A Plastics. Meanwhile, Tan Tien Plastic Packaging, a listed company, surprised the Vietnam plastics industry as it fell into South Korean hands.
Tan Tien’s CEO Le Minh Cuong found that a large amount of the company’s shares were going to the pockets of a South Korean investor. Cuong then hurried to mobilize all possible financial sources in an effort to raise his ownership ratio in Tan Tien. However, it was too late. Cuong now holds 23.67 percent of the company’s shares, while the 'South Korean hunter' now holds the controlling stake.
The golden age of Tan Tien was in 2011 and before, when its turnover was VND1 trillion and the profit was VND85 billion. After acquiring Tan Tien, the investor from South Korea is restructuring the enterprise.
As MRC informed earlier, in 2014, Vietnam Polystyrene expanded the production capacity of its expandable polystyrene (EPS) plant. The capacity of the plant raised to 50,000 mt/year. Located in Vietnam, the plant previously had a production capacity of 40,000 mt/year.
MRC