TOKYO -- Japanese trading house Sojitz has purchased Vietnam's Saigon Paper for about 10 billion yen ($91.2 million), inking a deal to tap the fast-growing demand for cardboard and tissue paper in the Southeast Asian country.
Sojitz acquired more than 90% of Vietnam's largest maker of tissue paper from the company's founders. Saigon Paper, which sells tissues under the Bless You brand, also produces toilet paper and cardboard components. Yearly sales top $100 million on production capacity of 40,000 tons of residential-use paper as well as 230,000 tons of industrial paper.
Cardboard demand in Vietnam surged more than tenfold over the past decade, benefiting from the rise of online shopping and the move of textile and electronics production to the country from China. Toilet paper demand quintupled in that time as living standards improved amid annual growth in gross domestic product of about 6%.
Saigon Paper's founders formed the company in 1997, but now see a need for greater efficiency and capital investment. Sojitz will send six managers from Japan to help revamp the company's finance and accounting systems. The trading house will consider updating the manufacturer's production facilities as well.
Sojitz and Saigon Paper will work together on recyclable wastepaper collection from industrial parks, logistics facilities and the Ministop convenience stores that the Japanese company helps operate.
The trading house, which has been expanding operations in Vietnam, aims to raise its papermaking sales in the country around 40% to roughly 18 billion yen by 2022.