SCG adds packaging capacity

SET-listed Siam Cement Group (SCG) has expanded its packaging paper operations in the Philippines as part of the company’s commitment to regional business expansion.

United Pulp and Paper Co Inc (UPPC), a packaging subsidiary of SCG, in which the company indirectly holds a 98.75% stake, will add packaging paper capacity of 230,000 tonnes per year to its existing operations located in Calumpit, Bulacan, in the Philippines.

With a total investment of 5.1 billion baht, this investment sum includes various related machinery, civil work, financial costs and working capital.

Operations are expected to commence in the fourth quarter of 2020.

This investment will double UPPC’s existing capacity and contribute to SCG’s total packaging paper capacity of 2.8 million tonnes per year across Thailand, Vietnam and Philippines.

The company’s capacity expansion aims to tap into the Philippines’ continuous growth in demand for packaging paper, making it a net import market. SCG will benefit from an abundant supply of domestic raw materials, said the company statement.

Demand for packaging paper in the Philippines is estimated at 1 million tonnes this year and forecast to expand by 5% per year because of the country’s high economic growth rate, said SCG.

The investment makes up 0.86% of total assets stated in SCG’s consolidated financial statements as of Sept 30. When combined with those in the past six months prior to this transaction, the total size is 6.64%.

Disclosure of this transaction is not required pursuant to the disclosure rule for acquisitions and disposition of assets, said the statement. The transaction is not a connected transaction.

Shares of Siam Cement (SCC) closed yesterday on the SET at 448 baht, up eight baht, in trade worth 610 million baht.