SCG unit inks pact to acquire 85% of Vietnam tile producer

Siam Cement Group holds 100 per cent of SCG Building Materials.

This transaction is subject to the fulfilment of the CSPA conditions, which is expected to be finalised in the first quarter of 2013, SCG president and chief executive officer Kan Trakulhoon reported to the Stock Exchange of Thailand yesterday.

Prime Group operates six ceramic-tile plants with a total capacity of 75 million square metres, and is one of Vietnam’s leading domestic producers with a domestic market share of about 20 per cent.

Prime Group possesses other key assets such as mines for clay, sand and feldspar, which are key raw materials for the production of ceramic tiles, in addition to a clay-roofing plant with a capacity of 1.5 million square metres.

SCG’s 85-per-cent investment in Prime Group is valued at Bt7.2 billion, while the original founders will continue to retain a 15-per-cent stake, Kan said.

After this acquisition, SCG will have a total production capacity for ceramic tiles of 225 million square metres, of which 48 per cent is in Thailand, 33 per cent in Vietnam, 14 per cent in Indonesia, and 5 per cent in the Philippines.

SCG has indicated a strategic commitment to grow and enhance its capabilities and offerings within Asean.

The Prime Group acquisition follows that of the ceramic-tile facilities of Keramika Indonesia Associasi in mid-2011 and the increased stake in the ceramic-tile producer Mariwasa-Siam Ceramics in the Philippines early this year, Kan said.