SCG started in Vietnam with joint ventures and investment cooperation, but then accelerated with a series of dominant share purchases, M&A.
SCG Packaging (SCGP), a member company of SCG Group (Thailand) has just announced an agreement to buy 70% shares of Duy Tan Plastic Manufacturing Company, one of the leading enterprises in the Vietnamese market. hard plastic packaging products.
This move not only extended the list of SCG’s investments in Vietnam, but also increased the group’s position in the packaging segment, which was already deviated from foreign businesses. With the addition of Duy Tan Plastics, the list of companies in SCG’s packaging segment increased to 8, with total revenue of this business segment surpassing VND 10,000 billion.
SCG Group, a giant Thailand, is one of the leading enterprises in Southeast Asia. The Thai group is also among the earliest foreign investors in Vietnam right after the revised Foreign Investment Law took effect in 1992.
Compared with businesses from Europe, Korea, and Japan, Thai groups are assessed to have some advantages due to their geographical location and cultural similarity. Up to now, SCG Group has managed more than 20 subsidiaries in Vietnam, focusing on three main businesses: Cement – Building Materials (SCG Cement – Building Materials), Petrochemical (SCG Chemicals) and packaging (SCG Chemicals). SCG Packaging).
As for packaging, SCG has been around for more than a decade and accelerated in the second half of 2020. Similar to other businesses, the group started with joint ventures but then expanded faster. through mergers and acquisitions (M&A) deals.
Before the deal with Duy Tan Plastic, in December 2020, another SCG Group member company, TCG Solutions, took the last steps to acquire Bien Hoa Packaging Company (SVI).
SVI was the forerunner to be the first corrugated paper packaging factory in Vietnam. Duy Tan is also one of the leading companies in the market for hard plastic packaging products.
In addition to SVI and Duy Tan, the list of SCG’s member companies in the packaging segment also includes Kraft Vina Paper Company – the largest packaging manufacturer in Vietnam, Tin Thanh Plastic Packaging Company (BATICO), Tan A Industry Company, AP Packaging Company, Alcamax Packaging Manufacturing Company and Packamex Company.
The revenue scale of Kraft Vina in the last two years reached 5,000-6,000 billion VND, the highest among SCG’s member companies in the packaging segment in Vietnam.
The next two positions are two new deals, Duy Tan Plastic and Bien Hoa Packaging. BATICO, an enterprise that SCG bought 80% of its shares in 2015, achieved revenue of about VND 1,400-1,500 billion in the period of 2018-2019. The rest of the businesses have a turnover of several hundred billion dong per year.
Increasing influence in the Vietnamese market through SCG’s M&A also deviates the packaging industry’s market share towards foreign firms.
In a report on the packaging industry, FPTS said that most of the firms with large production scale in this industry, including paper packaging and plastic film packaging, are foreign invested (FDI). ).
Among them, the leading companies in paper packaging are Ojitex, Tohoku (Japan), YFY, Viet Long (Taiwan) or Alcamax, Tan A (Thailand). With the group of plastic packaging, the names that occupy the leading market share are Tan Tien Packaging – Tapack (Korea), Bitico (Thailand), JS Packaging (Korea), Huhtamaki (Finland), Nga Mee (Taiwan). Taiwan) or Tong Yuan (Taiwan).