SCG acquires Peute Recycling in the Netherlands

SCG Packaging Public Co. Ltd., Bangkok, has completed the acquisition of Peute Recycling B.V., an international paper and plastic packaging materials recycling company based in Dordrecht, the Netherlands, for 78.19 million euros, or $79.7 million. This purchase is through SCGP Solutions Pte. Ltd., a wholly owned subsidiary of SCGP. Peute’s financial performance will be consolidated from July 2022 onward.   

According to a news release, the transaction will enable SCG to expand into the rapidly growing international packaging material recycling business. It also will assist in SCG’s long-term strategic direction to strengthen all levels of the packaging business from raw material sources, upstream and downstream production through to the integrated packaging solutions.   

SCG says the global surge of sustainability awareness and demand for recycled content have been expanding significantly and continuously. The prominent packaging materials recycling and sourcing capabilities from this transaction will allow SCG to fulfill the emerging demand for recycled materials, which are driven by changes in customers' and consumers’ behavior. The ability to directly access the sources of recovered paper also will provide SCG the opportunity to enhance the efficiency of recycling operations in the Association of Southeast Asian Nations by adopting the practices of the advanced waste management model in Europe.   

Peute says it can competitively source 1 million tons of recovered paper (RCP) and 100,000 tons of recovered plastics at its facility in Dordrecht annually. It also has an ongoing project to relocate the facility to Alblasserdam, Netherlands, to double the sourcing capacity and improve cost efficiency.   

In 2021, the company recorded revenue of 249 million euros ($254 million), a profit of 3.2 million euros ($3.26 million) with assets of 52 million euros ($53 million) at the end of the year.  

As SCG has been expanding its diversified and integrated packaging business, the key strategic raw material for the fiber packaging operation is RCP. At present, SCG uses 4.4 million tons of RCP annually and expects to increase its use with the expansion of packaging paper capacity going forward. The expansion will create competitiveness for SCG in terms of RCP sourcing networks through owned recycling stations, direct collection from primary sources and local suppliers and diversified import sources from the USA, Europe, Japan and Oceania.   

Currently, SCG operates more than 50 facilities across Thailand, Vietnam, Indonesia, the Philippines, Malaysia, the United Kingdom and Spain. SCG is listed on the Stock Exchange of Thailand and has a current market capitalization of approximately $6.3 billion.    

The acquisition of the subsidiary would equal 1.4 percent of total assets stated in SCG consolidated financial statements as of Mar. 31, and when combined with those in the past six months before the date of this transaction, the total size is 2 percent. Thus, investment disclosure is not required under the disclosure rule for the acquisition and disposition of assets. This transaction is not a connected transaction.