TWPC announced the acquisition of TDC to increase the shareholding proportion to 100% Supporting High Value-Added Tapioca Starch Business

BackMar 29, 2019

Ready to become the leader of the tapioca starch business – starch related food products in Asia

Thai Wah Public Company Limited or TWPC released that “Thai Wah Bio Power Limited or TWBP”, a subsidiary of the Company has satisfied the agreement on the acquisition of ordinary shares in “Tapioca Development Corporation Limited or TDC”, manufacturer and distributor of Modified Starch, amounting to 166,668 shares or 33.33% to increase the shareholding proportion to 100%. Supporting revenues and profit of High Value-Added tapioca starch business. Big boss “Ho Ren Hua” providing focus for a fully integrated response to customer requirements, targeting 10 billion baht revenues, aiming to be a leader in the tapioca starch business and starch related food products in Thailand and the Asian region.

Mr. Ho Ren Hua, Chief Executive Officer and director, Thai Wah Public Company Limited (TWPC), the manufacture and distribute tapioca starch products as well as a leader in food products, such as fresh and dry vermicelli noodle in Thailand, informed that Thai Wah Bio Power Limited or TWBP, a subsidiary company, acquired 166,668 ordinary shares, or equivalent to 33.33% of the total shares of Tapioca Development Corporation Limited or TDC, a manufacturer and distributor of modified starch from Japan Corn Starch Company Limited or “LCS”, at the purchase price of 220 million baht. Hence, the Company directly and indirectly holds the shares equivalent to 100%.

The share acquisition transaction constitutes an asset acquisition transaction pursuant to 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 (including any amendment thereto), and the Notification of the Board of Governors of the Stock Exchange of Thailand Re: Disclosure of Information and Other Acts of Listed Companies Concerning the Acquisition and Disposition of Assets, 2004 (including any amendment thereto) (collectively, the “Notifications on Assets Acquisition or Disposal”), representing the highest transaction value of 5.06%, calculated by applying the Net Tangible Asset (NTA) Basis, based on the Consolidated Financial Statement for the period ending 31 December 2018, which has been audited by the certified public accountant of the Company. In addition, after accumulating the value of this transaction with other asset acquisition transactions during the past six months, the highest total transaction value calculated by applying the Total Value of Consideration Basis will be equivalent to 15.08%, resulting in this transaction being classified as a Type 2 Asset Acquisition Transaction pursuant to the Notifications on Assets Acquisition or Disposal, i.e., a transaction with a value of 15% or higher but lower than 50%. Consequently, the Company has the duty to disclose the information memorandum of the entering into of the transaction to the Stock Exchange of Thailand (the “Stock Exchange”), and to serve a disclosure regarding the entering into of the transaction to the shareholders within a period of 21 days from the date on which the information memorandum is disclosed to the Stock Exchange.

“We decided to invest more in the Company, Tapioca Development Corporation Limited (TDC) of 33.33% through a subsidiary company in order to make the business more efficient and expand the export market more widely as well as support an increase in the Company’s revenues and profits in order to achieve sustainable growth in the long-term. Besides, this is also in accordance with the Company's strategy on investment expansion plan by focusing on expanding the proportion of revenue and profit derived from the High Value-Added products in order to higher margin and lower fluctuating than native tapioca starch products. The combination between a strong business and High Value-Added tapioca starch products will allow the company to expand its customer base and better meeting consumer demands. This will be another factor supporting the company's growth, committing to be a regional leader in tapioca starch and starch related products,” said Mr. Ho Ren Hua.

Mr. Ho Ren Hua informed that continued the business plan in 2019, the revenue is expected to reach up to 10 billion baht from a continuous sales growth in every products, such as starting consolidated revenues from new factory as Mae Sot, revenue growth in High Value-Added tapioca starch products, increase in TDC's shareholding to 100%, and production capacity expansion, which also focus on expanding markets in China and Taiwan as there is continuously increasing demand. However, the Company set up a total CAPEX of approximately 2,000 million baht within the next 2 years to support the business expansion from the existing business, while also maintaining a high margin. The investment is including acquisitions or M&A businesses that have synergy to the Company's core business both domestically and internationally in order to achieve the goal of becoming "A leader of the tapioca starch