Japanese multinational corporation Mitsui and food container manufacturer FP Corporation (FPCO) have entered an agreement to buy all the shares of Lee Soon Seng Plastic Industries (LSSPI).

Established in 1984, LSSPI is one of the leading manufacturers and sellers of functional food containers in South-East Asia. It is being bought from Malaysian investment holding company SCGM.

The company’s capabilities cover the entire manufacturing process, from product designing and moulding to delivery of the finished products.

LSSPI primarily serves food manufacturers and packaging distributors in Malaysia, Singapore, the Philippines and other countries in South-East Asia, as well as Australia.

The deal is valued at around JPY16bn ($122.6m) and its completion is subject to receiving necessary permits and licences, including approval through a special resolution at SCGM’s shareholders’ Extraordinary General Meeting.

It is expected to close in the second quarter of the fiscal year ending next March.

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Following the acquisition, Mitsui will hold a 60% stake in LSSPI, with FPCO owning the remaining 40% stake.

Mitsui said that the partners will leverage their investees’ network to improve LSSPI’s production efficiency and create functional food container products to meet market requirements and increase sales.

The two companies made the investment amid an increase in demand for functional food containers in South-East Asia.

The growth is driven by the modernisation of retail business models, a rise in supermarkets and convenience stores and the expansion of the food delivery market.

There has also been a growing need for more sophisticated food containers developed for the purpose of preventing food loss, including microwave-safe containers and containers that can both delay the product’s expiration date and increase its long-term storage.

As part of its Medium-term Management Plan, Mitsui has set ‘Market Asia’ as one of its strategic focus areas and aims to build a consumer platform in the region.