SCGP Enters into the Packaging Materials Recycling Business in USA

SCG Packaging Public Company Limited (SET: SCGP) announced on Monday the signing of a share purchase agreement along with the completion of merger and partnership (M&P) for 90.1% stake in Jordan Trading Inc. (Jordan), a trader of recovered paper (RCP) based in New York, USA. Payment for the 90.1% stake is the immediate US$1.98 million (approximately THB73 million). 

This transaction is made through a newly set-up, wholly-owned, Thai subsidiary of SCGP. The remaining 9.9% stake in Jordan will be held by SCG International USA Inc. (SCG INTL US), which is a subsidiary of The Siam Cement Public Company Limited. The consolidation of Jordan’s financial performance will be from September 2022 onward. 

Jordan is an established RCP trader with over 34 years of experience. The company has a sourcing network that largely spans the Mid to East coast of the USA, the largest exporting country of high-quality RCP. Jordan’s annual sourcing capacity is 0.1 million tons of recovered paper per year with a logistics management system that covers both inland transportation and sea freight. In 2021, Jordan recorded revenue of US$15.5 million (approximately THB568 million), profit of US$0.1 million (approximately THB4 million) with assets of US$3.2 million (approximately THB117 million) at the end of the year. 

This transaction is part of SCGP’s medium-term strategic objectives to reinforce the packaging materials recycling business while strengthening all levels of packaging operations from diversified raw material sources, upstream and downstream production through to the integrated packaging solutions. Together with Peute Recycling B.V. (Peute), the addition of Jordan would enhance SCGPs’ sourcing capabilities and international network of recovered materials. 

The investment in Jordan would also augment the company with direct access to the source of high quality American Old Corrugated Containers (AOCC) which is key raw material that adds premium strength to packaging paper and fiber packaging production. 

Moreover, one of the post-merger integration synergies would be on operational capabilities and best practice sharing among SCGP’s distinguished ASEAN recycling network, Peute’s leading waste management model in Europe and Jordan’s efficient recycling operation in the USA. 

SCGP is committed to fulfilling and facilitating the increasing preference for sustainable packaging through products ranging from pulp & paper, packaging paper, fiber packaging, performance & polymer packaging, labware, and other outstanding solutions. Currently, the company operates over 50 facilities across Thailand, Vietnam, Indonesia, the Philippines, Malaysia, the United Kingdom, Spain and the Netherlands. 

SCGP is listed on the Stock Exchange of Thailand and has a current market capitalization of approximately US$6.3 billion (THB230,000 million).