TWPC invest over Baht 548 million

BackJan 18, 2019

Announced the closing of its acquisition of Maesot Starch Co., Ltd and Maesot Biogas Co., Ltd.

Supporting tapioca starch business, targeting to be the leading food-grade tapioca starch in Asia

Thai Wah PLC or TWPC spends over Baht 548 million to invest in a new tapioca starch factory, targeting revenue of 10 billion baht, "Thai Wah or TWPC" acquired of the assets in "Mae Sot Starch Company Limited " and " Mae Sot Biogas Company Limited" (MSS), a manufacturer and distributor of tapioca starch. The Big Boss "Ho Ren Hua" expects the positive synergies to diversify supply sources of raw materials and increase production capacity, supporting customer needs worldwide to be a regional and innovation leader in starch and starch related product.

Mr. Ho Ren Hua, Chief Executive Officer and director, Thai Wah Public Company Limited (TWPC), the manufacture and distribute tapioca starch products and starch-related products in Thailand, the Company now has 12 operations across the region, developing our food and starch products to serve over 20 export markets globally, informed that the Company has set the 2 years capex of approximately Baht 2,000 million, to support its growth potential in the long term, while maintain the gross profit margin at a high level. In addition, acquisitions or M&A should create positive synergies for the core business of the Company, both domestic and international, to be a regional and innovation leader in starch and starch related product.

Maesot Starch Co., Ltd and Maesot Biogas Co., Ltd is located in Mae Sot District (The Company), Tak Province, conducting business as a manufacturer and selling tapioca starch as well as biogas. The Company is established in 2008 and has a production capacity of approximately 60,000 tons per year of tapioca starch and 1 MW of electricity production capacity the assets including land, buildings, machinery and equipment totaling value of Baht 548 million.

The above mentioned acquisition is not considered as a connected transaction because the seller is not a related person of the Company. However, it is considered as an asset acquisition transaction of the Company pursuant to the Notification of the Capital Market Supervisory Board No. TorChor 20/2551, Re: Rules on Entering into Material Transactions Deemed as acquisition or disposal of assets, due to the maximum transaction value calculated under the total value of consideration basis based on the latest reviewed consolidated financial statements of the Company for the period ended September 30, 2018 is equivalent to 7.97%. After accumulating the value of the said transaction with the other assets acquisition transitions occurring during the six-month period prior to the date of this transaction, the maximum transaction value is equivalent to 13.47%, calculated under the total value of consideration basis. Accordingly, the Company is not required to prepare and disclose an information memorandum to the Stock Exchange of Thailand pursuant to the Notification of the Capital Market Supervisory Board.

“This acquisition expands and strengthens TW’s production base in Thailand while enabling us to capitalize on the growth for tapioca and starch related products globally. We plan to fully integrate this operation into TWPC within 2019 in line with our growth strategy to be a leading regional player and our core vision to create value from Farm to Shelf. With this new acquisition, we seek a broader raw material base to develop existing and new products in tapioca to cater to our key customers in ASEAN; China, USA and Europe. M&A represents one of our drivers for growth, as we seek to strengthen TW’s position globally and capitalize on the of wave growing food demand over the next decade” Mr. Ho Ren Hua said.