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A new facility will be built in Vinh Phuc
province in northern Vietnam, to begin operations in early 2024,
which will raise total production capacity to 870,000 tonnes of
packaging paper per year, up from 500,000, SCGP said in a
statement.
It will be run by Vina Kraft Paper, a joint venture between SCG
Packaging and Japan's Rengo Company, of which SCGP holds 70%.
"Vietnam has strong domestic consumption and is an important
export base in the region, a big draw for multinational
companies to invest their operations there," chief executive
Wichan Jitpukdee said.
Wichan anticipated Vietnamese demand growth of 6% to 7% annually
until 2025.
SCGP, a unit of Thailand's largest industrial conglomerate, Siam
Cement Pcl, said it would use cash and debt to finance the
expansion.
The facility is the latest move by a Thai firm to expand in
Southeast Asia, with Vietnam, a fast-growing country of 98
million people, among the most desirable.
Lender Bank of Ayudhya Pcl last month said it would 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's badly. In August, the government
cut https://www.reuters.com/article/thailand-economy-gdp-idUSL4N2PL05N
its 2021 economic growth forecast to 0.7 to 1.2% from 1.5 to
2.5%, the third time it has done so.
The Thai economy slumped 6.1% last year.
Vietnam's outlook was brighter https://www.reuters.com/world/asia-pacific/vietnam-minister-sees-2021-gdp-growth-35-40-media-2021-09-15
with the government expecting up to 4% growth
(This story corrects paragraph 2 to show overall production
capacity will be increased to 870,000 tonnes, not capacity of
the new facility)
(Reporting by Chayut Setboonsarng; Editing by Martin Petty)
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