SCGP has been continuously expanding its investment in the packaging materials recycling business in response to the surge in market demand for sustainable packaging as part of the evolving consumer trends. This has led to the signing of share purchase agreement along with the completion of merger and partnership (M&P) for a stake in "Jordan Trading Inc. (Jordan)", a trader of recovered paper (RCP) based in New York, the USA. The acquisition enables the Company to attain an additional 100,000 tons per year of recovered paper sourcing capacity, and enhances operational potential through the partnership with "Peute", the Netherlands' largest packaging material recycling company while being able to exchange knowledge to strengthen the efficiency of the recycling operations.
Mr. Wichan Jitpukdee, Chief Executive Officer, SCG Packaging Public Company Limited, SCGP, announced that the increasing trend in the demand for sustainable packaging has motivated SCGP to continuously expand its investment in the packaging materials recycling business to fulfill such demands and enhance the Company's packaging business operation at all levels, from diversified raw materials sources, the upstream and downstream production through the integrated packaging solutions. Thus, the Company recently acquired a 90.1% stake in Jordan Trading Inc.(Jordan), a trader of RCP based in New York, the USA. This transaction is made through a newly set-up, wholly-owned, Thai subsidiary of SCGP. Payment for the 90.1% stake is the immediate US$1.98 million (approximately THB 73 million). The remaining 9.9% stake in Jordan will be held by SCG International USA Inc. (or "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 poses a sourcing network that largely spans the Mid to East coast of the USA, the largest exporting country of high-quality RCP, with annual sourcing capacity is 0.1 million tons of recovered paper per year with logistics management system that cover both inland transportation and sea freight. In 2021, Jordan recorded revenue of US$15.5 million (approximately THB 568 million), profit of US$0.1 million (approximately THB 4 million) with assets of US$3.2 million (approximately THB 117 million) at the end of the year.
The latest investment marks an ongoing investment in the expansion of its packaging materials recycling business through merger & partnership following the latest disclosure in July when the Company entered into a 100-percent stake in Peute Recycling B.V., the Netherlands' largest packaging materials recycling and trading company of paper and plastic. This transaction is part of SCGP's medium-term strategic objectives to enhance the capability of its packaging materials recycling business and strengthen the Company's integrated packaging business. Moreover, the synergy between Jordan and Peute will enhance SCGP's 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.
"SCGP is confident that this business synergy will enable company to exchange best practices and knowledge among SCGP's distinguished ASEAN recycling network, Peute's leading waste management model in Europe and Jordan's efficient recycling operation in the USA with the aim to further strengthen the Company's overall operational capability." Mr. Wichan added.
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.