SEKISUI CHEMICAL CO., LTD. (President and Representative Director: Teiji Koge; hereinafter, “SEKISUI CHEMICAL”) on October 18 acquired 15% of outstanding shares of TIEN PHONG PLASTIC JOINT STOCK COMPANY (listed on the Hanoi Stock Exchange, hereinafter, TifoPlast), a plastic pipe manufacturer in Hai Phong City in the north of the Socialist Republic of Vietnam. This will further strengthen the relationship with the TifoPlast Group and accelerate the acquisition of demand for water infrastructure development throughout Vietnam.
1. Background
In SEKISUI CHEMICAL Group's medium-term management plan "SHIFT 2019 -Fusion-" for the fiscal years 2017 to 2019, the Urban Infrastructure & Environmental Products Company (President: Hajime Kubo) positions business expansion in the Asia region, particularly the ASEAN region, as one of its growth strategies. We are working to expand sales of products for water and sewage systems and plants in the piping and infrastructure fields.
In January 2015, we established SEKISUI VIETNAM PIPE SOLUTIONS COMPANY (currently SEKISUI VIETNAM COMPANY) in Hanoi City in northern Vietnam, established an OEM supply system for our products together with TifoPlast, and we have been conducting joint marketing. In addition, with the TIEN PHONG PLASTIC SOUTH JOINT STOCK COMPANY (President: Dang Quoc Dung, hereinafter, TPS) with whom we signed an agreement for capital participation and business alliance in July this year, we are starting to concretely examine the licensing of our patents and production know-how to acquire demand in the southern Vietnam market.
* Refer to SEKISUI CHEMICAL's July 6, 2017 press release: Capital Participation in a Plastics Manufacturer in Vietnam
2. Aims and details of capital participation
Following the agreement with TPS, the capital participation in its substantial parent company TifoPlast will further strengthen the relationship with the TifoPlast Group including between TPS and SEKISUI CHEMICAL. In addition to acquisition of demand for water infrastructure development throughout Vietnam, we will accelerate the following initiatives from (1) to (3) aiming at early entry into the ASEAN region.
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(1) License the TifoPlast Group to use our patents and production know-how and strengthen the TifoPlast Group's product lineup in order to acquire demand throughout Vietnam. |
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(2) Expand sales of products related to construction, civil engineering, and plants by utilizing the TifoPlast Group's sales networks. |
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(3) Outsource production of products for other ASEAN regions and Japan by utilizing production bases of the TifoPlast Group. |
Including these efforts, we aim to increase Urban Infrastructure & Environmental Products Company's sales in Asia (excluding Japan) by 3.3 billion yen in fiscal 2019 (75% increase from 2016).
In addition, we will dispatch one person as a director of TifoPlast from SEKISUI CHEMICAL, and we will provide cooperation for the growth and development of both companies.
3. Summary of TifoPlast
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1) Company name: TIEN PHONG PLASTIC JOINT STOCK COMPANY |
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2) Headquarters location: No.222 Mac Dang Doanh Street, Hung Dao Ward, Duong Kinh District, Hai Phong City |
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3) Established: 1960 |
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4) Representative’s name: TRAN BA PHUC |
[TifoPlast, TPS bases]
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5) Principal business: Production and sale of plastic products in general |
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6) Capital: Approximately 4.4 billion yen (as of the end of June 2017) |
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7) Number of employees: Approximately 1,300 (as of the end of December 2016) |
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8) Net sales: Approximately 21.7 billion yen (2016 results) |
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9) Production and sales base: Hai Phong City |
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Disclaimer
This press release may contain forward-looking statements. Such forward-looking statements are based on current expectations and beliefs and are subject to a number of factors and uncertainties that could cause actual results to differ materially from those expressed or implied by such statements due to changes in global economic, business, competitive market and regulatory factors.