Major Thai firms make fortune in Vietnam
Despite the challenges posed by the Vietnamese market, several Thai companies have achieved significant financial success through stock purchases and merger and acquisition (M&A) deals in Vietnam. These ventures have resulted in substantial earnings from running companies, listing them on stock exchanges, and investing billions of U.S. dollars in Vietnamese stocks.
One notable example is Binh Minh Plastic JSC, a leading plastics manufacturer in Vietnam. In early 2018, the company became a subsidiary of Nawaplastic Industries, a member of Thailand’s Siam Cement Group. Nawaplastic increased its ownership in Binh Minh Plastic to 55 percent in early 2023. The company has experienced a positive profit trend in recent quarters, with second-quarter after-tax profits reaching VND294 billion ($12.4 million), double the figure from the previous year. In the first half of the year, Binh Minh Plastic recorded an after-tax profit of VND575 billion ($24.2 million), a 2.2-fold increase compared to the previous year and 88 percent of its full-year target.
Another successful M&A deal involving a Thai investor is the divestment of Bien Hoa Packaging JSC. TCG Solutions Pte, a subsidiary of Thailand’s Siam Cement Group, acquired a 94-percent stake in the Vietnamese packaging company in late 2020. Despite a 25 percent year-on-year decrease in net revenue in the second quarter of 2023, Bien Hoa Packaging reported an after-tax profit of VND38.5 billion ($1.6 million), a 20 percent increase from the previous year. In the first half of the year, the company achieved an after-tax profit of VND68 billion ($2.9 million), a 13 percent rise year-on-year.
One of the significant M&A deals involving Thailand was ThaiBev’s acquisition of a 53.59-percent stake in Saigon Beer-Alcohol-Beverage Corporation (Sabeco) for $5 billion through Vietnam Beverage Co. Ltd. in 2017. Decree 100, which strictly prohibits drink-driving, and the COVID-19 pandemic have affected Sabeco’s business operations. However, the company remains financially strong, with significant cash flow and interest earnings. Other Thai investments in Vietnam include C.P Vietnam’s stake in Sao Ta Foods JSC and the takeover of Ngoc Nghia Industry – Service – Trading JSC by Indorama Netherlands, a subsidiary of Thailand’s Indorama Ventures. Siam Brothers Vietnam, listed on the Ho Chi Minh City Stock Exchange, is one of the few foreign-invested firms in Vietnam. The company, established in 1995 and invested in by Thailand’s Siam Brother Group, specializes in producing ropes, twines, and nets for fishermen. While its revenue reached VND104 billion ($4.38 million) in the second quarter of 2023, the company reported an after-tax loss of VND7.7 billion ($324,140). In the first half of the year, Siam Brothers Vietnam recorded a consolidated revenue of VND195 billion ($8.2 million) and an after-tax loss of VND18.2 billion ($766,150). Veerapong Sawaytyanon, the chairman of the company, mentioned that the local fishery market faces difficulties, and the company is focusing on boosting exports to increase sales.