CPPC To Raise B1bn From IPO To Expand Bio-plastics Business :  November 14, 2007

According to Marss Wan Cheng Kuo, president and chief executive of CPPC Plc, the company would offer about 40 million new shares in the planned IPO to raise as much as one billion baht. Proceeds would go towards expanding the group's food-packaging, non-woven business, and new businesses including bio-plastics. The company has 190 million shares at 10 baht par with registered capital of 1.9 billion baht. According to Chaipong Chainapaporn, CPPC's senior vice-president, 2009 is expected to be a perfect time for an IPO given the prospect that raw materials, both from local and foreign suppliers such as Iran and the Middle East, are projected to be in oversupply, making plastic pellets relatively cheap.

CPPC Plc operates in Thailand, China and Vietnam, and earned 12.83 billion baht in sales revenue in 2006. Seventy percent of its revenue was generated in Thailand, with the remaining 30% from overseas operations in China and Vietnam. Mr Kuo said CPPC expected to earn sales revenue of about 13.9 billion baht this year, a rise of only 8% from a year earlier because of the baht's appreciation. The company's executives predicted the baht would play a key role next year in the company's performance, with sales expected at only 8% compared to strong growth as high as of 10-15% in previous years. According to Mr Kuo, the foreign-exchange factor also played a critical role, prompting CPPC to halt new investment in its overseas operations. However, as part of its plan to expand its food-packaging business, the company is set to invest as much as 450 million baht next year in the two facilities in Thailand, 250 million baht of which would go to the new facility designated for bio-plastic products including food containers, identity cards, credit cards and phone cards in Rayong. Through a joint venture with the US-based EcoSpan, the new bio-plastic facility would commence operations by the third quarter of next year, with production capacity of 5,000 tonnes a year. Seventy-percent of capacity would be for export. The company expects to generate about about 900 million baht a year in sales revenue from the bio-plastic business. ''We hope over the next 3-5 years, all CP Group products will be packaged in customer-friendly and biodegradable plastic of CPPC,'' said Mr Kuo. by CHAROEN KITTIKANYA The Bangkok Post November 14, 2007 posted @ Thursday, November 15, 2007 11:40 AM