By Binh Nguyen - The Saigon Times Daily

HCMC - Daio Paper Corp. and BridgeHead as the investment arm of Development Bank of Japan Inc. have acquired 38% of Saigon Paper Corp.’s shares as part of the cooperation and investment agreements they signed in HCMC on Wednesday.

Cao Tien Vi, chairman of Saigon Paper, told the Daily after the signing ceremony that the Japanese partners’ investment would bring the chartered capital of the local company to around VND300 billion (more than US$14.5 million). But he did not disclose how much they would invest in the local company.

Vi said his company had selected the two strategic foreign investors from a number of potential investors as they had long-term investment plans. In addition to investment, Daio would send its senior executives and technicians to help run the company’s second paper factor in Ba Ria-Vung Tau Province.

Scheduled for commissioning in the third quarter of this year and installed with imported equipment and technology, the My Xuan II factory in My Xuan A Industrial Park will annually turn out 35,000 tons of tissue and 140,000 tons of cartons among others. This VND2-trillion (US$95.6 million) facility together with the existing My Xuan I paper factory will enable the local company to triple its production capacity.

Yasushi Nishikawa of Daio Paper Corp. said in a statement released at the signing event that he believed in Saigon Paper’s strong growth after over six months of looking into this corporation. “We want to be part of Saigon Paper’s future success and have long-term commitment to the company and Vietnam’s paper industry.”

Nishikawa told the event that Vietnam was one of the most potential paper markets in the world as it grew more than 10% a year.

Daio will also assist in human resource development and technology transfer. Vi said Saigon Paper would send two groups of employees to Japan for attending courses, with the first group planned to depart in May.

Established in 1943, Daio is one of the leading manufacturers of tissue and industrial paper in Japan. Daio’s factory on the island of Shikoku produces different types of pulp and paper items, and the corporation’s revenue exceeded 423 billion yen (over US$5 billion) last year.

The investment arm of Development Bank of Japan will give advice to Saigon Paper’s finance management in order to back the company’s strategy to enhance its operational efficiency and the competitiveness of its products at home and abroad.

Regarded as the biggest Vietnamese private paper producer in Vietnam, Saigon Paper turns out both tissue and industrial paper products. The company currently holds 24% of the tissue segment in Vietnam and appears in the list of top five manufacturers of industrial carton in the country.

Though Saigon Paper currently sells most of its products in Vietnam through 150 distributors and more than 50,000 points of retail sale, the company has also managed to export its tissue to markets in Asia, America and Africa.

Nguyen Quoc Thuc, deputy general director of Saigon Paper, said the Japanese partners would help the company further penetrate the Japanese market under the agreements, which were signed one week after the company shipped its first containers of tissue to that market.

Thuc told the Daily before the signing event that Saigon Paper would export paper products worth US$120,000 to a Japanese company. This partner will consider buying more from Saigon Paper.

Saigon Paper has set up targets in its development strategy until 2015 for revenue of VND4 trillion (over US$191 million) by that year, market shares of 40% for the tissue and 15% for the industrial paper segments in Vietnam. Last year, the company earned VND725 billion in revenue, up 24% compared to the year before.