SCG to spend $240 mln on acquiring Prime Group

Thailand’s Siam Cement Group (SCG) will spend some $7.2 billion baht ($240 million) to buy in 85 percent stake of Prime Group, a Vietnamese tile manufacturer.

The contract between the two parties will be completed early next year.

The acquisition of one of the largest brick manufacturers in Vietnam is a strategic move to strengthen the competitive edge of SCG in Southeast Asia, said the Bangkok-headquartered firm.

Prime Group, formerly known as Vinh Phuc Co Ltd specializing in manufacturing ceramic tiles, was established in 1999 from a plant with an annual capacity of 2 million square meters in Huong Canh industrial park in the northern province of Vinh Phuc.

The company, renamed into Prime in 2005, grew into a large multi-disciplinary corporation with more than 24 subsidiaries and more than 10 affiliated companies.

Among them are 8 brick manufacturing plants with a designed capacity of 90 million square meters per year and 1 tile roofing factory.

SCG early this year spent $5.5 million to acquire white cement maker Buu Long in southern Dong Nai Province.

The group is also looking for other investment opportunities in Vietnam, including participation in a $4.5 billion petrochemical project in Vietnam.

SCG began to expand into Vietnam in 1992. It currently has 13 companies with more than 1,500 employees, about $330 million in total assets and $340 million in revenue.

SCG’s subsidiaries in Vietnam are operating in the fields of production and trade, concrete construction products, plastic materials, paper materials, production and packaging of industrial investment.

Last year, sales of SCG in Vietnam reached 2.104 billion baht ($68.5 million). Meanwhile, its total revenue reached 9.098 billion baht, up 14 percent from last year.

Given the recent evaluation of Prime Group at $277 million, SCG has brought DWS Vietnam Fund (DVF) and VinaCapital, the two current investors owning 11.9 percent stake and 7.1 percent stake of Prime, a 60 percent and 30 percent profit for their investments.

In the most recent report in October 12, DVF recognized the value of the investment in Prime Group at $16.4 million, hence, with a holding of 11.9 percent stake, this fund’s valuation at Prime Group was at $138 million.

Prime was then revalued by VinaCapital Vietnam Opportunity Fund Ltd (VOF), at $190 million, so with 7.1 percent stake in the firm, VOF investment was worth some $13.5 million.

The two funds, DWS and VinaCapital, lost 70 percent and 10 percent in their investments in Prime Group as of the end of 2011.

Source Tuoitrenews