SCC Acquires 9.22% in AJ and Establishes JV to Enhancing Downstream Products
SCC acquires 9.22% in AJ to get an entry into a high-growth business amid rising demand for food and beverage packaging.
The Siam Cement Public Company Limited (SCC) announced an approval from its Board of Directors to invest in A.J. Plast Public Company Limited (AJ) and establish a joint-venture company with AJ that will engage in the production and distribution of Biaxially Oriented Film.
SCC announced that its Board of Directors Meeting held on October 29, 2020 has approved SCG Chemicals Co., Ltd. (SCG Chemicals), a wholly owned subsidiary of SCC, (i) to invest in A.J. Plast Public Company Limited (AJ), listed company in the Stock Exchange of Thailand and one of the leading flexible packaging manufacturers in Southeast Asia, by subscribing 40,560,773 newly issued ordinary shares (Subscribed Shares) (equivalent to 9.22%) in AJ at the offering price of Baht 17.15 Baht per share totaling of approximately 696 million Baht via private placement (Private Placement Offering), and (ii) to establish a joint-venture company with AJ that will engage in the production and distribution of Biaxially Oriented Film (BO Film) in Vietnam.
The total capital value of this investment is 700 million Baht while SCG Chemicals will hold a 45% stake and the remaining 55% will be held by AJ which SCG Chemicals investment will be 315 million Baht. SCG Chemicals’ obligations to subscribe the Subscribed Shares from the Private Placement Offering is conditional upon the execution of joint venture agreement between SCG Chemicals and AJ.
This investment provides SCG Chemicals entry into a high-growth business amid rising demand for food and beverage packaging. Establishing a BO film JV in Vietnam and Southeast Asia will enable the company to serve the country and region’s fast-growing economy and increase appetite for consumer-related food and beverage products. This reinforces SCG Chemicals’ strategy to move further downstream with a goal of enhancing the downstream products portfolio. The JV aims to leverage the strength of both, AJ and SCG Chemicals for future BO Film platform expansion in Southeast Asia.