Thailand-based SCG has acquired a 55% stake in Indonesia-based packaging paper maker Fajar Surya Wisesa (Fajar) for a total consideration of THB21.15bn ($665m).

The investment is expected to strengthen SCG’s Packaging Business in the future.

SCG president and CEO Roongrote Rangsiyopash said: “SCG is thriving to push forward long-term growth as one of its key strategies in 2019 by continuously expanding its businesses in ASEAN countries.”

Established in 1988, Fajar currently has 1,300,000 metric tonnes of annual production capacity. It offers various products such as kraft liner board and corrugated medium paper for carton-box packaging, and coated duplex board for display packaging.

The deal is expected to close during the third quarter of this year. SCG will finance the transaction amount through internal sources.

Rangsiyopash added: “For the future growth opportunity in the packaging business, SCG is in the process of exploring the feasibility of raising equity at the SCG Packaging level. This feasibility is expected to be completed by the end of 2019.

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“SCG is in the process of exploring the feasibility of raising equity at the SCG Packaging level.”

“The major shareholding in Fajar will allow SCG to enhance its ASEAN growth, especially in Indonesia that provides tremendous future growth opportunity for Packaging Business.”

SCG’s Packaging Business is also planning to strengthen its business across ASEAN countries by establishing more production sites in ASEAN countries with a focus on Vietnam, Malaysia, Indonesia, and the Philippines.

Last January, SCG’s wholly owned subsidiary SCGP Solutions (Singapore) completed the MYR104.5m ($26.65m) acquisition of a 68.3% stake in Malaysian packaging firm Interpress Printers Sendirian Berhad (IPSB).

The remaining shares of IPSB were retained by the existing owners.