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January 19, 2011

Rengo Acquires Vietnamese Corrugated Plants

Rengo Co., Ltd. (Head Office: Kita-ku, Osaka; President & CEO: Kiyoshi Otsubo) announces that Thai Containers Group Co., Ltd. ("TCG"), 30% owned by Rengo, signed an agreement on January 18 with Malaysian company Golden Frontier Bhd, to acquire Alcamax Packaging (Vietnam) Joint Stock Company ("Alcamax"), a corrugated box manufacturer in Vietnam. AP Packaging (Hanoi) Co., Ltd. and Packamex (Vietnam) Co., Ltd., both Alcamax subsidiaries, are also part of the acquisition. The total purchase price is approximately US$ 25 million (equivalent to JPY 2.1 billion), including the existing debts and other expenses.

As a result of this acquisition, Rengo’s production bases in Vietnam are Vina Kraft Paper Co., Ltd. (with an annual production capacity of 220,000 tons) for producing containerboard, and three plants for producing corrugated board and boxes (Alcamax, AP Packaging, and the already affiliated New Asia Industries Co., Ltd.), strengthening their corrugated business in major markets in both the northern and southern parts in the country. Packamex is a corrugated box manufacturer in Ho Chi Minh City.

Both Alcamax and AP Packaging have integrated production plants that include corrugators and converting lines (with a combined total production capacity of approximately 7.50 million m2/month). When added to the existing capacity of New Asia Industries, the total monthly production capacity of Rengo in Vietnam will stand at 14.50 million m2.

Last year, the Vietnamese corrugated market grew by 9.3% year-on-year and is expected to continue growing at an annual rate of around 11%. Through this acquisition, Rengo hopes to more firmly establish its structure for supplying containerboard and corrugated boxes in Vietnam and further improve product quality. At the same time, the Company plans to strengthen collaboration between its Vietnamese plants and its corrugated plants in China, Thailand, Singapore, Malaysia, and Indonesia, as well as its paper mill in China’s Zhongshan, in order to fortify its integrated supply structure from containerboard to corrugated boxes in China and Southeast Asia.

The acquisition is expected to be formally completed at the end of March.

 

Corporate Outline

・Alcamax Packaging (Vietnam) Joint Stock Company

Location

Vietnam-Singapore Industrial Park, Binh Duong, Vietnam
(25km north of Ho Chi Minh City)

Business Scope

Manufacture and sales of corrugated boards and boxes

 

・AP Packaging (Hanoi) Co., Ltd.

Location Nam Sach Industrial Zone, Hai Duong, Vietnam
(70km east of Hanoi)
Business Scope Manufacture and sales of corrugated boards and boxes