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SCG Packaging Plc (SCGP) is planning to invest in the rigid packaging business in America, aiming to build a production facility there to reduce the impact of US President Donald Trump's tariff policy. The company is conducting a feasibility study on the investment and will visit the US next week to discuss the project with prospective partners, said Wichan Jitpukdee, chief executive of SCGP. "We are not going to invest through merger and acquisition, instead seeking partners to co-invest in rigid packaging," he said.
The company has been interested in such an investment project since the pandemic, but delayed its plans as it required a large budget in order to build a factory. Investing in warehouse development seemed to be a more plausible option at that time, said Mr Wichan. But after Trump announced that he would impose steep reciprocal tariffs on many countries, including Thailand, SCGP had to think more seriously about constructing a factory, he said.
The tariffs were set to take effect on April 9 but were postponed for a period of 90 days, allowing countries that did not retaliate against US tariffs to hold negotiations regarding trade matters. The US is a major market for SCGP's rigid packaging business. In the first quarter of this year, SCGP exported packaging products worth 1.
27 billion baht to the US. Its products, worth 966 million baht, were also indirectly shipped to America via its customers. SCGP also sold products worth over 2 billion baht to China which then exported them to the US.
"Trump's tariff policy is causing SCGP to seek new markets, paricularly South Asia, Oceania and the Middle East, in order to depend less on the Chinese market," said Mr Wichan. In Southeast Asia, the packaging industry has a positive outlook in the second quarter, with demand within the consumer packaging segment expected to continue to grow, driven by domestic stimulus policies, he said. GDP growth across the region is projected to average between 2-7%.
In the first quarter, the company earned 32.2 billion baht, posting a profit of 900 million baht, attributed to the company's agile adaptation strategy and expansion into the Asean market..
