Thai conglomerate SCG dominates Vietnam's plastic production industry

SCG headquarters in Bang Sue District, Bangkok, Thailand. — Photo courtesy of SCG

HANOI (Vietnam News/ANN): After buying Duy Tân Plastic Corporation, Thailand’s Siam Cement Group (SCG) is cementing its domination of Vietnam's plastic production industry.

Under the contract signed on Feb 9 via a virtual conference, Duy Tân will sell 70 per cent of its shares in five of total twenty-two subsidiary companies, including Duy Tân Plastic Manufacturing Corporation and Duy Tân Long An Corporation, to SCG’s SCG Packaging, Duy Tân said.

Duy Tân Plastic is a leading company in the plastic goods market in Vietnam with revenue of VNĐ4.7 trillion in 2020. It has nearly 1,000 commodities units and 16,000 distribution agents across the country.

The company’s annual capacity reaches 116,000 tonnes of hard plastic packaging and plastic goods.

SCG, Thailand’s largest cement producer, will buy the stakes over three years, starting from 2021. The deal takes a long time as it is based on business results, Duy Tân Plastic said.

Through the deal, SCG and Duy Tân Plastic want to create a solid foundation for a completed supply chain.

Duy Tân Plastic aims at developing hard plastic packaging products, plastic goods and expanding export markets, while the investments help SCG Packaging broaden its hard plastic packaging businesses in Asean, especially strengthen capacity to serve FMCG producers and consumers in Vietnam.

The deal is a part of SCG’s investment plan worth 10 billion baht (US$334 million) to extend its businesses in Vietnam that has big and growing demands in plastic packaging products.

Wichan Jitpukdee, CEO of SCG Packaging, said that the company will keep investing in Vietnam, resulting in revenue growth of over 10 per cent each year.

The plastic production industry in Vietnam has around 3,300 enterprises with total value of approximately US$18 billion.

The upstream sector of this industry includes petrochemical refineries and chemical enterprises whose main activities are to convert fossil materials into raw plastic beads.

Meanwhile the downstream sector is turning raw plastic beads into plastic products. The downstream can be divided into four main segments, including plastic packaging products, plastic building materials, plastic goods and engineering plastics.

With the deal for Duy Tân Plastic’s shares, SCG is dominating Vietnam’s plastic industry, especially in plastic packaging products and plastic building materials. These two segments account around 61 per cent of the total market value.

In 2019, SCG Packaging founded Vina Kraft Paper in Bình Dương Province to produce paper packaging products with total capacity of 500,000 tonnes/year.

The company continued to invest in Tín Thành Packing JSC (BATICO) in 2015. And recently SGC bought 94 per cent of Biên Hòa Packaging JSC’s stakes, with the deal worth of VNĐ2.07 billion (US$89 million).

SCG also owns stakes in many plastic companies including Bình Minh Plastics JSC, Vietnam Construction Materials JSC, Prime Group, Viet Thai Plastchem Joint Venture Company Ltd, TPC Vina Plastic and Chemical Corporation Ltd, Vietnam Chemtech Company Ltd and Minh Thai Plastic Material Company Ltd.

In 2018 June, SCG signed a contract to buy 29 per cent of Vietnam Oil and Gas Group (PetroVietnam)’s shares in Long Son Petrochemical Complex Project, raising its equity from 71 per cent to 100 per cent with total investment value of 8.5 billion baht per year. — Vietnam News/Asia News Network

Article type: metered
User Type: anonymous web
User Status:
Campaign ID: 46
Cxense type: free
User access status: 3

Vietnam , Thailand , SCG , plastic , production


Next In Aseanplus News

Asean News Headlines as at 7pm on Thursday (April 22)
Belgian ambassador to South Korea apologises for wife's 'assault'
Hong Kong arrests six in US$322mil money laundering case
Singapore quarantines hundreds after dorm workers infected
Canadian judge grants delay in Huawei exec Meng's extradition hearing
Cambodia's Kampong Cham and Siem Reap regions extend Covid-19 restrictions
Biden's virtual climate summit draws all 40 invited world leaders
Covid-19: 2,875 new cases, Kelantan has most infections with 662
Laos steps up border patrols to prevent spread of virus
Four Vietnamese universities enter THE’s Impact Rankings 2021

Stories You'll Enjoy