Stocks & Shares

Siam Cement’s subsidiary set to float in $1 billion IPO

  • Siam Cement Group’s (SCG) packaging subsidiary is planning to launch a $1 billion IPO by mid-2020
  • SCG Packaging is looking to expand to new local and international markets
  • The company’s 2018 books show a steady and fast-growing company

Thailand’s Siam Cement Group’s packaging subsidiary is finalizing plans to file a local IPO. Two sources close to the matter alluded that the subsidiary was looking to raise circa $1 billion from the float.

The subsidiary, SCG Packaging Plc, could be announcing its planned IPO as early as this week.

“Siam Cement has been considering options for this business and an IPO is the next step,” said one of the sources.

The sources sought to remain anonymous as news of SCG Packaging’s IPO is yet to be made public.

The subsidiary’s independent beefing up of funds is part of the group’s greater plan to have a firm grip of the Middle East cement sector.

SCG Packaging is Siam Cement Holding’s forestry, packaging, packaging paper, and pulp and paper subsidiary. Siam Cement is the largest and oldest cement and building materials company in Thailand and the larger South East Asia.

Forbes 2016 report ranked SCG as the second-largest company in Thailand and the 604th (public company) worldwide.

Siam Cement’s packaging partner owns 99% of its shares and is said to be targeting to file its IPO some time in December before launching the issue within the first half of next year, this is according to one of the sources.

Siam’s Packaging subsidiary’s books haven’t disappointed, at least not in the past few years. A look at the company’s 2018 books reveals a 7% rise in revenue to 87 billion baht (about $2.88 billion) with a profit of 6 billion baht denoting a 37% jump from the previous year’s. SCG noted that the figures were the highest in nine years.

SCG Packaging has been making strategic investments in other firms, perhaps to cement its name in the business. In May this year, the packaging giant acquired a 55% shareholding in an Indonesian paper packaging firm, PT Fajar Surya Wisesa Tbk for $655 million.

The company intends to retain 70% of its shareholding and offer 30% to new investors. If successful in its IPO, SCG Packaging plans to use the additional funds to foster local and internal expansions, Chief Executive Roongrote Rangsiyopas said.

The firm will be looking to fund mobilization channels and boost its capacity while pursuing its long-term strategy to venture into new markets.

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