Dongwha Enterprise, the top materials manufacturer in South Korea has entered the Thai market, having acquired a manufacturing unit in Thailand. According to the Korea Times, the company recently announced that it acquired the medium-density fibreboard (MDF) manufacturing unit of Agro Fiber, a subsidiary of Double A established in 1998, for 23 billion won (US$20.7 million).
With this takeover, Dongwha now owns five overseas production facilities, including those in Malaysia, Vietnam and Australia, where it produces wood materials and lumber for industrial use.
On top of gaining access to Agro Fiber’s business networks, the manufacturing unit in Thailand would be able to use raw materials from timber harvested next to the facility to produce fibreboards, crucial in a time when the fibreboard market in Southeast Asia is expected to continue growing. Thailand alone holds a market share of 50 per cent in the region.
“In terms of raw material prices, Thailand has been stable with less fluctuation, as compared with Vietnam and Malaysia,” Lee Si-joon, Dongwha’s senior vice president, said. “We expect the acquisition can create synergy with our branches in Malaysia and Vietnam so we can raise our profitability.”