Tien Wah to buy BAT unit in Indonesia

PETALING JAYA: Tien Wah Press Holdings Bhd has been awarded a tender by the British American Tobacco (BAT) group in Indonesia entitling it to buy a BAT group member involved in printing and, along with that, a six-year contract to supply packaging materials.

The company, which derives more than 80% of its revenue from printing packaging materials for the tobacco industry, told Bursa Malaysia yesterday that the acquisition price for the tender was about 304 billion rupiah (RM96.73mil).

Tien Wah said it was given the tender by PT Bentoel Internasional Investama Tbk (Bentoel Group), a member of the BAT group in Indonesia. This entitles Tien Wah or its subsidiaries to acquire the entire paid-up capital of Bentoel Group subsidiary PT Bintang Pesona Jagat, which undertakes Bentoel Group’s printing business there.

The acquisition comes together with the contract, whereby Bentoel Group would appoint the Tien Wah group as the supplier of its printing supplies for six years.

Tien Wah, however, did not give an estimate of the contract’s value.

It said the acquisition and contract would be conditional on and expressly limited to the acceptance of the terms, conditions and procedures determined by Bentoel Group and the prevailing laws and regulations of Indonesia.

The terms and conditions would be agreed on in formal contracts to be signed by the parties soon, it added.

It is believed that the proposed move would allow Tien Wah to partly offset any loss of business following the proposed move by its single biggest client, British American Tobacco (M) Bhd (BAT Malaysia), to close down its Petaling Jaya plant by the second half of next year and source tobacco products from sister companies overseas.

It was reported that the contract with BAT Malaysia, which generated a revenue of RM289mil for Tien Wah in 2015, would expire at the end of the year.

BAT had said it would import the cigarettes from regional manufacturing centres in Singapore, Indonesia and South Korea.

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