Tien Wah Press terminates Vietnam joint venture

PETALING JAYA: Tien Wah Press Holdings Bhd (TWPH) has terminated its joint venture (JV) with Vietnam’s Dong Nai Food Industrial Corp (DOFICO) as the latter failed to comply with the agreed minimum printed carton volumes of tobacco packaging as set out in the JV.
TWPH is primarily engaged in the printing services for tobacco packaging and cigarette filters.
In May 2015, TWPH entered into a strategic JV agreement with DOFICO for the disposal of TWPH’s 50% stake in its unit, now renamed Toyo (Viet)-DOFICO Print Packaging Co (TVDP) to DOFICO, in order to secure long-term sales volume from a major tobacco company in Vietnam.
TWPH told Bursa Malaysia that the termination agreement comprises the repurchase of the remaining 50% shares held by DOFICO in TVDP for RM6.37 million.
The JV had affected the operations of TVDP, whose accumulated net loss stood at US$253,014 (RM1.05 million) as at Dec 31, 2016.
TWPH said the deal termination and shares acquisition will allow the group to re-focus on TVDP’s future business without having to rely on DOFICO’s commitment.
TWPH’s share price gained one sen or 0.66% to RM1.52 today with 1,000 shares traded.