Sapa expands in South-East Asia

Sapa intends to enter a joint venture with the Vietnamese Ben Thanh Group by acquiring 65% of the shares of the aluminium extrusion company Vijalco.
The Vietnam Japan Aluminium Co, (Vijalco) is a joint venture between the Japanese companies Tachibana and Sojitz Corporation and the Vietnamese Ben Thanh Group, established in 1996. Vijalco is located in Ho Chi Min City. The current production capacity is quite small (about 5000 tonnes), but still the company has established a strong position in selected segments of the Vietnamese market. Its operations include one press, an anodizing line and some fabrication activities. The production covers both standard profiles to the building and construction segment and more specialized solutions for the furniture and automotive industries. The company has 150 employees.

The principal agreement was signed in Oslo in the prescence of the Prime MInister of Vietnam (standing second from the left)

Sapa sees the opportunity, together with its local partner the Ben Thanh Group, to develop Vijalco to become a main player in the Vietnamese market and support Sapa in its overall strategy of establishing a broader footprint in Asia. The total value of the deal, including investments to upgrade equipment, investments in new production capacity and extending land leases, is approximately 100 MSEK.'

"It is Sapa’s clear ambition to grow in Asia and we are currently working on a number of projects to achieve this. Sapa’s original plan was to enter Vietnam at a later stage, however, we were by this opportunity given a chance to join forces with a strong local partner and access a rapidly growing economy. The acquisition of Vijalco thus only marks a first step for further progress in the region", says Björn Wiggen Sapa’s President and CEO.

"The Ben Thanh Group is very pleased to have Sapa as an industrial partner in Vijalco, and we see great opportunities to develop the company further both in productivity and quality by establishing this Joint Venture with the worlds’ leading aluminium extrusion company”, says Mr. Nguyen Quang Tien General Director of the Ben Thanh Group.
 
The principal agreement that was reached today, means that Sapa intends to acquire 65% of the shares in Vijalco by purchasing the Japanese parties’ shares, and by participating in a planned capital increase. The transaction needs to be approved by the respective companies’ Boards, as well as the Vietnamese authorities, and is expected to be closed during the third quarter of 2010.

“Vijalco is regarded as one of the top performers in the Vietnamese market in terms of quality, enabling them to serve challenging customers”, says Svein Tore Holsether, Business Area President Sapa Asia & Middle East. “We wish to use our expertise and capabilities to develop this position and utilize the Sapa sales network to grow the business”.

For more information please contact:
Svein Tore Holsether, Business Area President Asia & Middle East, +47 95 15 52 22 or Marius Grønningsæter, SVP, Legal/M&A Asia & Middle East, +47 90 51 90 77.