SCG buys in Indonesia to become top Asean packaging solutions provider
SCG has accelerated its growth strategy by announcing its latest investment of Bt21.15 billion in PT Fajar Surya Wisesa Tbk (Fajar), one of the largest packaging paper providers in Indonesia.
Roongrote Rangsiyopash, SCG’s president and CEO, said: “SCG is pushing forward long-term growth as one of its key strategies this year by continuously expanding its businesses in Asean countries. Recently, SCG’s packaging arm bought a 55 per cent stake in Fajar, a leading packaging paper company that is listed in the Indonesian stock exchange. This investment is valued at approximately 9.6 trillion rupiah [approximately Bt21.15 billion] and is expected to be completed in the third quarter, whereby financing will come from internal sources. For future growth opportunities in the packaging business, SCG is in the process of exploring the feasibility of raising equity at the SCG packaging level. This feasibility study should be completed by yearend.
“The major shareholding in Fajar will allow SCG to enhance its growth in Asean, especially in Indonesia. Considering Indonesia’s population of 270 million and its per capita consumption of packaging paper, the market-growth potential there is almost three times that of Thailand.”
Over the years, SCG’s packaging business has demonstrated an ability to grow progressively and act promptly when required to handle business challenges. The business aims at becoming a leading total packing solutions provider by establishing more production bases in Asean countries, such as Vietnam, Malaysia, Indonesia and the Philippines.
Furthermore, the packaging arm of SCG has been developing innovative technology to add value to products, services and the production process to fulfill the needs of enterprises and consumers. The business is also driving the “circular economy” in line with the SCG’s practice, which aims to maximise efficient resource utilisation.
Packaging business recorded Bt87.25 billion in revenue from sales and Bt6.31 billion in profit for 2018. Meanwhile, with a total sale of 1.38 million tonnes of packaging paper in 2018, Fajar registered sales of 9.94 trillion rupiah (about Bt21.90 billion) and recorded profits of 1.41 trillion rupiah (about Bt3.10 billion).