By Malini Hariharan
After picking up a 30% stake in Chandra Asri, the Siam Cement Group (SCG) is looking to seal its next Indonesian buy.
Two companies, SCG and Japan's Itochu Corp, are reported to have advanced to the second round of bidding for chlor-alkali and vinyls producer Sulfindo Adisuha. The deal is expected to be worth around $700m.
The two companies are among three or four parties short-listed for the second phase of bidding after the sale process attracted 8-10 parties in the first round.
But SCG stands a good chance of winning the race especially after South Korean major, Hanwha Chemical, decided to drop out.
As reported by the blog earlier, Sulfindo would fit well with SCG's existing product portfolio and help it expand its share in the growing Indonesian market which it currently serves from a a 120,000 tonnes/year plant operated by subsidiary TPC Indo Plastic & Chemical.
Sulfindo produces 262,000 tonnes/year of caustic soda, 295,000 tonnes/year of ethylene dichloride (EDC), 100,000 tonnes/year of vinyl chloride monomer (VCM) and 80,000 tonnes/year of polyvinyl chloride (PVC).
The move also confirms SCG's commitment to expand its position in Indonesia. Earlier this year the Thai conglomerate completed the acquisition of an Indonesian ceramics producer and building materials distributor.
If successful, Sulfindo would be SCG's largest overseas acquisition. The company certainly has the money - it had said earlier this year that it would utilise cash reserves of $2.5bn for strategic acquisitions in the ASEAN region.