(Cairo, Egypt & Bangkok, Thailand - 14 November 2018) - Indorama Ventures Public Company Limited (IVL) has completed the acquisition of 74% of the share capital of Medco Plast for Packing and Packaging Systems S.A.E. (Medco Plast) from Middle East Glass Manufacturing Co. S.A.E. (MEG) and the Samaha family. Following the acquisition, MEG will retain a 16% shareholding in Medco Plast, and the Samaha family 10%.
Medco Plast is the largest manufacturer of recyclable PET preforms, injection molded products, and closures to all the multinational soft drink and water manufacturers operating in Egypt, with a 25% market share. Medco Plast currently has 11 state-of-the-art production lines with a combined annual production capacity of 70,000 metric tons of PET preforms.
Egypt is one of the most developed and diversified economies in the Middle East, with economic growth of around 5%. Egypt's membership of COMESA regional economic bloc, coupled with its strategic location linking the EMEA and Asia, makes the country the gateway to the East and North African markets with favorable trade agreements. This acquisition will provide Indorama Ventures exposure to the East African PET packaging market, complementing its existing footprint in West Africa, where the company has presence in Nigeria and Ghana.
Indorama Ventures will bring best-in-class knowhow capabilities as well as supply chain economies to further enhance Medco Plast's leadership position and grow it into the leading regional player.
Mr. Aloke Lohia, Group CEO of Indorama Ventures, commented, "The acquisition of Medco aligns with Indorama Ventures' strategic focus, which includes capitalizing on growth opportunities in emerging markets. Medco's strong presence in the domestic market and a longstanding customer relationship with all beverage majors operating in Egypt will enable the Company to support growing local customers' demand and provide a platform for further growth in the Middle East and African regions."
Mr. Abdul Galil Besher, Chairman of MEG, stated: "We are delighted to announce this transaction with Indorama Ventures which will add considerable depth to the existing technical strengths and business and management capabilities that Medco needs to enable its transformation to a world class supplier to the beverage, pharmaceutical and personal care sectors in the region. Importantly, this transaction will also allow MEG to deleverage following the aggressive acquisition program started in 2014 and focus ever more closely on driving the efficiency and performance of our core glass container business."
Mohamed Samaha, the founder, CEO, and a shareholder in Medco commented: "I strongly believe the partnership with Indorama Ventures will help Medco fuel and advance its ambitious business plan. We look forward to working hand in hand with Indorama to unlock Medco's full potential"
HC Securities and Investment acted as the sole financial advisor to MEG and the Samaha family, Matouk Bassiouny & Hennawy acted as legal counsel to MEG, Shehata Law firm acted as legal counsel to the Samaha family, while Baker & McKenzie acted as the legal counsel to Indorama Ventures.