Rengo Co., Ltd. announces that it has agreed with SCG Packaging Public Company Limited, a Siam Cement Group company, on the underwriting of an increase in capital of United Pulp and Paper Co., Inc. (UPPC), a containerboard manufacturing and sales company in the Philippines that is a subsidiary of SCG Packaging, and the acquisition of 25% of the shares in UPPC. Rengo’s underwriting of the capital increase of UPPC is subject to approval by the Philippines Securities and Exchange Commission, and it is planned that the acquisition of the shares will be completed during the 1st Quarter of FY2020.
UPPC has a production capacity of 230,000 tonnes of containerboard from two paperboard machines at its mill in Calumpit, Bulacan, approximately 50 km north of Metro Manila, and is the leading domestic supplier of containerboard in the Philippines, with the top share of containerboard production. The company is currently in the process of building a third paperboard machine for producing containerboard which it plans to complete by the end of 2020, and which will double the production capacity when the new paperboard machine becomes operational.
In the Philippines, as in other Southeast Asian countries, there continues to be strong economic growth, and there has been a market expansion in the packaging materials market in line with the increase in domestic consumption, so it is expected that there will be increasing demand for containerboard. Rengo’s equity participation in UPPC will contribute to the further economic development of the Philippines as well as producing synergies with Rengo Group companies in Japan and overseas, and with the possibility in sight of future advancement into the corrugated board business in the Philippines, it will strengthen the supply system for responding to globalized packaging needs.