BANGKOK (Reuters) – Thailand-based SCG Packaging Pcl (SCGP) on Monday announced an 11.8 billion baht ($ 353.93 million) expansion of its wrapping paper business in Vietnam, anticipating growth in the demand.
A new factory will be built in Vinh Phuc province in northern Vietnam to start operations in early 2024 and produce 870,000 tonnes of wrapping paper per year, up from 500,000, SCGP said in a statement.
It will be led by Vina Kraft Paper, a joint venture between SCG Packaging and the Japanese company Rengo, in which SCGP holds 70%.
“Vietnam has a strong domestic consumption and is an important export base in the region, a great attraction for multinational companies wishing to invest their operations there,” said Managing Director Wichan Jitpukdee.
Wichan expected Vietnamese demand to grow 6-7% per year until 2025.
SCGP, a unit of Thailand’s largest industrial conglomerate, Siam Cement Pcl, said it would use cash and debt to fund the expansion.
The facility is the latest move by a Thai company to expand into Southeast Asia, Vietnam, a fast-growing country of 98 million, among the most desirable.
Lender Bank of Ayudhya Pcl announced last month that it will acquire a consumer finance company, SHB Finance https://www.reuters.com/article/bank-of-ayudhya-vietnam-idCNL1N2PW0RZ in Vietnam for $ 155 million.
The pandemic has hit Thailand hard. In August, the government reduced https://www.reuters.com/article/thailand-economy-gdp-idUSL4N2PL05N its economic growth forecast for 2021 to 0.7 to 1.2% from 1.5 to 2.5 %, the third time he did it.
The Thai economy fell 6.1% last year.
Vietnam outlook was better https://www.reuters.com/world/asia-pacific/vietnam-minister-sees-2021-gdp-growth-35-40-media-2021-09-15 with government pending up to 4% growth
(Reporting by Chayut Setboonsarng; Editing by Martin Petty)
