Spicers is selling its Asian operations to Japan Pulp & Paper (JPP) for $15m SGD , equivalent to $15.2m AUD, saying it will now focus exclusively on its Australian and New Zealand businesses.
Spicers will also receive the net proceed from the planned sale of the Singapore property owned by its Singapore division.
JPP will gain Spicers subsidiaries in Malaysia and Singapore along with a representative office in Vietnam. If the deal passes conditions including approval from the Competition and Consumer Commission in Singapore (CCCS), it is expected to be completed towards the end of the first half of FY2019.
David Martin, CEO of Spicers says, “The focus on our Australian and New Zealand business will be to continue to deliver on our promises. We have a strong business, with great people, and there are many opportunities for us to further optimise our positions and maximise returns in our chosen market segments.
[Related: Spicers earnings up 63 per cent]
“I want to thank our team in Asia, for their ongoing focus and professionalism in effectively executing their strategies and delivering strong results for the business. I wish them well for an exciting future as part of JPP’s expanding Asian business upon completion of the transaction.”
JPP bought and combined two of Australia’s largest paper merchants, BJ Ball and KW Doggett last year for $75m, consolidating the two into Ball & Doggett. Japanese rival Nippon Paper Industries also has a hold in the local market, owning manufacturer Australian Paper.
In the past full year, the Asian operations underlying EBIT of $2.2m was 18.1 per cent higher than $1.8m in the pcp in local currency terms, which Spicers says was driven by strong sales in the print and packaging categories. The region generated sales of $86.6m, up by 11 per cent from $78m.
Jonathan Trollip, chairman, Spicers, adds, “Capital returned on the completion of the Asian operations will allow the Spicers board to consider options for a distribution to shareholders, and any other future opportunities available to enhance shareholder value. We will keep the market updated on any decisions taken.”
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