VIETNAM: TPC expands its plastics reach in Vietnam

Thai Plastic and Chemicals Plc (TPC), the Stock Exchange of Thailand (SET)-listed poly vinyl chloride (PVC) maker, has agreed to buy 22.67% of Vietnam's Tien Phong Plastics Joint Stock Co. (NTP) in a move to become a leading player in Vietnam.
The largest producer of its kind in Southeast Asia, TPC on 23 Mar. 2012 told the Stock Exchange of Thailand that its wholly owned subsidiary Nawaplastic Industry (Saraburi) Co. (NPI) has bought 9.82 million shares of NTP, a manufacturer and distributor of plastic pipe in Vietnam.

The deal makes NPI the second-largest shareholder of NTP after State Capital Investment Corporation (SCIC), which currently holds 37.1% of the Vietnamese company.

TPC managing director Kanet Khaochan said the acquisition is in line with the company's strategy of expanding into the downstream segment to cope with the volatility of PVC prices.

On Monday (19 March 2012), TPC said NPI purchased 5.85 million ordinary shares of Binh Minh Plastics Joint Stock (BMP), representing 16.73% of the Vietnamese plastic pipe company, also majority-owned by SCIC.

Kanet said BMP is the largest manufacturer and distributor of plastic pipe in southern Vietnam, while NTP is the biggest maker in the north. "We want to be one of the top players in the Vietnamese market in addition to Thailand, where we control a 50% market share," he said. He  declined to reveal the transaction value of either deal, saying the companies TPC acquired are listed in the neighbouring country. "We may consider raising our ownership to 49% in both of these companies in the future," noted Mr Kanet. He said TPC used cash from its operations to finance both deals without borrowing. The company's debt-to-equity ratio is 0.7 to 1. The company will continue to explore investment opportunities in Asean.

(Syed Rashid Ali, Karachi, Pakistan)
Source: Daily "Bangkok Post", Bangkok; 24 Mar 2012