Oji Holdings Corporation would like to announce that a share sale and purchase agreement for the acquisition of 80% of all the issued shares of People & Grit (M) Sdn Bhd (hereinafter “PG”), which is a local disposable diaper company in Malaysia, has been executed today. At the same time, we would like to announce that we have also decided to build a new disposable diaper factory in Malaysia.
1. Background of the share acquisition and the building of the new factory
Southeast Asia, with a population of more than 600 million people and more than 10 million newborn babies every year, has been enjoying a high annual GDP growth rate of more than 5%. The disposable diaper market in Southeast Asia is anticipated to grow further in terms of demand and Malaysia is geographically positioned in the heart of this Southeast Asian market. Since the acquisition of GS Paper & Packaging Sdn Bhd (hereinafter “GSPP”) in year 2010, which is Malaysia’s largest manufacturer of paperboard and corrugated container, Oji Group has mainly been carrying out acquisition of packaging companies. As of now, we have 2 paperboard mills, 6 corrugated container mills, etc. in Malaysia. As one of our major policies for growth strategies, Oji Group has announced the further expansion of overseas business to strive towards the realization of an innovative value-creating company. With regards to the disposable diaper business, we have positioned it as a priority business field. As announced on April 24, we have decided to conduct business in the manufacturing and sales of disposable diapers in Indonesia through a joint venture with PT Indofood CBP Sukses Makmur Tbk and we are in the midst of various preparations for this joint venture. Through the acquisition of 80% of the shareholdings of the local disposable diaper company and the building of the new disposable diaper factory in Malaysia this time, we plan to expand our sales of disposable diapers not only in the Malaysian market, but also mainly in the Southeast Asian market which is expected to see future expansion in demand. We strive to achieve a prompt expansion of our business while effectively utilizing our Group’s rich management resources in Malaysia and Southeast Asia.
2. Overview of the disposable diaper business in Malaysia
i) Regarding the share acquisition of PG
| Company Name | People & Grit (M) Sdn Bhd |
| Location | Selangor , Malaysia |
| Year of Establishment | Year 2002 |
| Business Line | Manufacturing and sales of disposable diapers for baby use |
| Number of Employees | Approximately 70 |
| Shareholding Ratio | Oji Holdings 80%, Founder's family 20% |
| Sales Revenue | MYR 53 million (approximately JPY 1.8 billion) (for the year ended June 30, 2014) |
| Total Asset | MYR 31 million (approximately JPY 1.0 billion) (as of end of June 2014) |
*The acquisition will be completed after the various terms and conditions of the contract are fulfilled.
*MYR 1 = JPY 33.0 (as of October 30, 2014)
ii) Regarding the building of the new disposable diaper factory
| Company Name | Oji Asia Household Product Sdn Bhd |
| Location | In the site of GSPP mill, Selangor , Malaysia |
| Year of Establishment | Year 2014 |
| Business Line | Manufacturing and sales of disposable diapers for baby use |
| Number of Employees | Approximately 70 |
| Shareholding Ratio | Oji Asia Management Sdn Bhd (OAM) 100% (OAM is a wholly-owned subsidiary of Oji Holdings) |
| Start of Operation | Scheduled to be in November 2015 |
Contact:
Hiroyuki Isono
Director of Board, General Manager of Corporate Planning Division, Oji Management Office Inc.
Phone: +81-3-3563-4385
