SCGP files IPO for up to 30% stake

SCG Packaging (SCGP) has submitted an IPO filing to list on the Stock Exchange of Thailand (SET), offering less than one-third of the company in shares to the public as it aims to expand domestically and overseas.

The shares will not exceed 30% of SCGP’s paid-up capital after completion of the IPO. SCG will continue to be the majority shareholder of SCGP, holding no less than 70% of the paid-up capital after the IPO.

Roongrote Rangsiyopash, president and chief executive of Siam Cement Group (SCG), Thailand’s largest cement maker and industrial conglomerate, said SCGP’s operations are expected to create value for potential growth in the future.

“The proceeds from capital raised from the IPO are for business expansion, such as increasing the production capacity of SCGP, mergers and acquisitions, loan repayment and working capital for business operations,” he said.

Of the total 1.374 billion shares, the company will allocate up to 1.194 billion shares, representing up to 27.7% of the total shares of SCGP, excluding shares set aside for over-allotment in case that option is exercised.

Up to 179.2 million shares are being designated as over-allotment shares, representing up to 15% of the total.

SCGP submitted its registration statement and draft prospectus to the Securities and Exchange Commission (SEC) on Tuesday.

The packaging business contributed 18% of SCG’s total revenue, while SCG Chemicals made up 46% and SCG Cement-Building Material 36%.

In 2018, packaging tallied total revenue of 87 billion baht.

Mr Roongrote said SCG will provide updates on any further progress of SCGP’s IPO plan.

SCGP plans to expand investment in domestic and overseas markets to support growth of the packaging market, especially in Asean.

“Asean has a great opportunity for

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The proceeds from capital raised from the IPO are for business expansion. ROONGROTE RANGSIYOPASH

President and chief executive, SCG

the packaging business as there is a high growth rate for consumer product packaging, food service products and products traded through e-commerce,” he said.

In early 2019, the company estimated Asean’s packaging market was worth US$50.5 billion.

SCGP predicts growth of 5% from the previous year thanks to economic expansion and the rise in demand for packaging.

In 2018, the packaging business had a capacity of 2.54 million tonnes of packaging paper, 495,000 tonnes printing and writing paper, 1.01 million tonnes of box packaging, 590 million square metres of flexible packaging and 300 million containers of rigid packaging.

In the third quarter of 2019, SCG Packaging recorded revenue from sales of 24.4 billion baht, a 10% year-on-year increase, mainly from the consolidated performance of newly acquired companies PT Fajar Surya Wisesa Tbk and Visy Packaging Thailand.

Profit for the period stood at 1.52 billion baht, dropping 11% year-onyear from higher financial costs.

In the first nine months of 2019, the packaging business recorded revenue from sales of 66 billion baht, similar to the same period last year.

Profit for the period totalled 4.24 billion baht, a decrease of 12% year-on-year.