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Published on April 10, 2008

The company yesterday inked the deals with Sino, a tracking-solutions provider, and labels manufacturer High Rich Trading and Service to acquire a 40-per-cent interest in each of them.

The other 60 per cent of both companies is held by the founder of the companies, Nguyen Quyet Thang, president of Sino and High Rich, and his associates. This acquisition marks Simat's first direct presence in Vietnam.

"The deals will help Simat expand its customer base in foreign markets and maintain its annual gross margin at about 30 per cent," said Simat CEO Thongkam Manasilapapan.

Last year, Simat posted revenue of Bt351 million for a net profit of Bt30.76 million.

Thongkam said most of Simat's customers were also expanding in the region, especially Vietnam, where the economy is growing at nearly 7 per cent a year.

Vietnam's consumer goods and retail sectors, which are the main targets for Simat's tracking-solution systems and label business, is mushrooming in Vietnam, Thongkam said.

Regarding High Rich, Simat will invest through its subsidiary, Simat Label (Thailand), in which it has a 60-per-cent stake. The remaining 40 per cent is held by Malaysia-based Grand-Flo Solution Berhad, a leading player in the region's tracking-solutions industry.

Based in Ho Chi Minh City, Sino is a provider of tracking-solution systems, while High Rich specialises in manufacturing bar-code labels.

With more than 12 years of experience in the industry, both Sino and High Rich are pioneers in their respective markets with a wide base of multinational customers with operations in Vietnam.

"Vietnam is an emerging market where there is a growing demand for tracking solutions," said Derrick Tan, managing director of the Grand-Flo Group and also chairman of Simat. He said among the main factors driving the country's economic growth was a rising inflow of foreign direct investment backed by an increasing number of multinational companies setting up.

Capital inflow toVietnam is expected to reach US$14.5 billion (Bt461 billion) this year, up 11.5 per cent from last year.

Thongkam said the acquisitions would help the companies integrate their business synergy.

Sino has major clients, such as Samsung, Fujitsu and Sanyo, and Simat, which has major customers in the retail sector, will drive Sino's market expansion.

Under the agreement, Sino and High Rich will provide a combined profit guarantee of about Bt22 million over two years. The acquisition will be financed by Simat's internally generated funds, which will be paid in three tranches within two years.

Sasithorn Ongdee

The Nation