Malaysia’s Toyo Ink diversifying into power generation

First project is 43 times larger than its market capitalization.

Printing ink and materials manufacturer Toyo Ink Group Berhad is seeking shareholders’ consent to diversify into the power sector in Vietnam. Toyo Ink intends to build a 2,000MW coal fired power plant named the Song Hau 2 facility in Hau Giang, Vietnam.

This plant forms part of the Song Hau Power Complex that consists of three power plants and is anticipated to have a combined capacity of 5,200MW. The complex will supply electricity to Vietnam’s southern region.

The plant is estimated to cost US$3.5 billion compared to the original estimate of US$2.5 billion set in 2011. The project cost is about 43 times larger than its market capitalization of US$25 million. Vietnam has approved the project.

Toyo Ink said it plans to finance the project via a combination of equity and borrowings. When finished, Song Hau 2 is expected to contribute positively to Toyo Ink’s earnings with a reasonably foreseeable yield.

Toyo Ink manufactures printing inks for the printing and packaging industries.