Information of CPL Group Public Company Limited Details of the Company
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Opinion of the Independent Financial Advisot on the Tender Offer of C.P.L. Group Public Company Limited’s Securities Appendix 1 : Information of CPL Group Public Company Limited Details of the company 1) History and major developments Year Major developments 1989 C.P.L. Group Public Company Limited was found on 28 June 1989 with an initial registered capital of Baht 120 million. The establishment of the company was made by the cooperation among five groups of companies, namely, Charoensin Group and Lien Dah Limited who had gained experience in tannery business through more than 40 years; Pan Overseas Corps who also had long experience in the business from Taiwan; Bank of Asia Public Company Limited and City Capital Co., Ltd which have financial and investment expertise in Thailand. CPL purchased a tannery facilities from Charoensin Group where was located at Bang Pu Mai, Mueng District, Samutprakarn province. The area was known as tannery industry area in Thailand. The production line was to process “Raw hide” to “Finished leather”. CPL began to supply finished leather to shoes manufacturers in Thailand mainly to major group of exporting shoes factories such as Pan Group and Saha Union Group, who supply sports shoes to large brands like Nike, Adidas, Timberland, and more. Their major products were Full Grain leather, Nubuck leather. 1990 In order to expand production capacity, CPL acquired the Wen Hwa Tannery (Thailand) Co., Ltd, located in Chonburi Province, for producing Split Suede leather CPL increased its registered capital from 120 to 180 MB for the business expansion which was the investment on the Wen Hwa Tannery (Thailand) Co., Ltd. Its operation was to process into “Wet Blue” and “Split Suede Leather” for supplying to the main factory in Samutprakarn province. The associated facility began its operation in September 1991. 1994 The Company went public and listed as a public company in the Stock Exchange of Thailand (SET). The company’s ticker in SET is “CPL”. 2001 To expand production capacity, CPL bought a plot of land with an area of 45,000 square meters located next to its tannery facility in Samut Prakarn. The new production capacity was increased to 2.7 million square feet (Sq.Ft.) per month. CPL diversified its business coverage by entering into a joint venture agreement with its strategic alliances in China in tannery and shoes business. The newly established JV tannery factory was located in Guangzhao, China. 2002 To provide after sales service and support major client in China, C.P.L. International Company Ltd was established in Guangdong area. The production started in the same year with capacity for finished leather at 2,000,000 square feet (Sq.Ft.) per month. 2015 On 20 July 2015 the Board of Directors passed a resolution for a joint venture investment with its Hong Kong business alliance by establishing Intergrate Leather Network Co., Ltd. (ILN) to exploit potential business opportunity in leather trading business and to allow CPL to have more flexibility in sourcing raw hide and wet blue. The objective of ILN is import and distribute all types of leather. CPL will hold a 40% equity stake in ILN. 60 Opinion of the Independent Financial Advisot on the Tender Offer of C.P.L. Group Public Company Limited’s Securities 2) Nature of business CPL Group Public Co., Ltd. is a fully integrated tannery. Its process starts from the salting fermentation of raw cowhide to the tanning through production procedures required high skills and experiences so that all finished leathers have the high quality. The most popular hides used as the raw material in the leather and leather product industry are cow hides considered to be a major raw material readily available with the vast global beef consumption. Most cow hides originate from USA, Europe, South America, Africa, India, and China. Cow hides and chemicals are main raw materials for CPL operation. CPL personnel have expertise and experienced in leather tanning which transforms raw hides into the hides by tanning, dyeing and finishing the rawhides into finished leathers. CPL employs high quality machinery with modern technology in order to enhance quality and efficiency of its production and to produce high quality products which are well regarded by customers. Typically the entire production process from transform cow hides to finished leather takes approximately 23 days. Key products of CPL are Full Grain Leather and Suede Split Leather, sold per sq. feet. Approximately 90% of revenues are made to shoes manufacturers in Thailand and abroad, mainly to major group of exporting shoes factories. Its key export markets include China, Vietnam, Indonesia, India, Combodia, Bangkladesh, etc. Its products is well regarded by global branded shoes companies, including but not limited to, Adidas, Timberland, Marks and Spencer, Lacoste, etc. CPL supplies tannery products which are main raw material in manufacturing sport and casual shoe. Its current production capacity is 2,500,000 square feet (Sq.Ft.) per month ) The Company has specialized personnel and expertise in tannery businesses, ranging from tanning, coloring, and finishing of rawhides. Coupled with the integration of new technology and machinery to help with production, the Company’s production line is of high efficiency and is able to produce high quality products to consumers. CPL strives to maintain high quality products and realizes in importance of its human resources to achieve sustainable growth. CPL has been awarded for numerous achivements from renown institutions in quality control and environmental management, e.g. ISO9001:2008, ISO:TS16949: 2009, ISO14001: 2004 and gold medal in environmental management from BLC. CPL has also achieved certification on Research and Development consistently every year, and will continue to maintain and improve the standards of systems in the future. Products or service offering Key products are Full Grain Leather and Suede Split Leather. CPL products are distributed to shoe manufacturer both locally and abroad. The majority of CPL products are full grain leather, split leather, nubuck leather made to order of customers. CPL products are all forms of finished cow leather. These products are packed in sheets, and will pass through a measuring machine (measured in square feet) before being sold. CPL operates only one shift production which last 8 hours, i.e. 8:00-17:00. Actual production are as follows: 61 Opinion of the Independent Financial Advisot on the Tender Offer of C.P.L. Group Public Company Limited’s Securities (Unit : Square Feet) Production 2015 2014 2013 Maximum capacity 30,000,000 30,000,000 30,000,000 Actual annual production 24,319,881 27,010,600 26,073,800 Capacity utilisation 81% 90 % 86% 3) The Board of Directors As at 11 January 2017 the Board of Directors of CPL comprised the following 9 directors: Number Name of Director Position 1. Mr. Manoch Wongcharoensin Chairman 2. Mr. Suwatchai Wongcharoensin Director 3. Mr. Lai Chi Hsiang Director 4. Mr. Kuo Shin Lun Director 5. Mr. Kitichai Wongcharoensin Director 6. Mr. Puvasith Wongcharoensin Director 7. Mr.Ruth Banomyong Director / Chairman of Audit committee 8. Mr. Mongkon Laoworapong Director / Audit committee 9. Mr. Supapat Ongsangkoon Director / Audit committee Authorized signatory of CPL requires co-signature of three directors in which at least one director is required from each of the following 3 groups. Group 1 – Mr. Manot Wongcharoensin and Mr. Suwatchai Wongcharoensin, Group 2 - Mr. Lai chi Hsiang and Mr. Puvasith Wongcharoensin, Group 3 - Mr. Kuo Shin Lun and Mr. Kitichai Wongcharoensin together with CPL’s company seal. 4) List of shareholders List of top 10 shareholders as at 30 December 2016 (the latest closing date of share registar) Name Total Shares % of total paid-up % of voting right capital 1. Wongcharoensin Group 13,536,240 51.27 51.27 1. Charoensin Holding Co.,Ltd. 10,032,000 38.00 38.00 2. Charoensin Asset Co.,Ltd. - - - 3. Mr. Manoch Wongcharoensin 1,013,220 3.84 3.84 4. Mrs.Thidaporn Wongcharoensin - - - 5. Mr.Wiwat Wongcharoensin 600,000 2.27 2.27 6. Ms.Nuchnapa Wongcharoensin - - - 7. Mr. Nattakrit Wongcharoensin - - - 8. Mr.Rattanachai Wongcharoensin - - - 9. Mrs. Usa Wongcharoensin 226,000 0.86 0.86 10. Mr. Puvasith Wongcharoensin - - - 62 Opinion of the Independent Financial Advisot on the Tender Offer of C.P.L. Group Public Company Limited’s Securities Name Total Shares % of total paid-up % of voting right capital 11. Mr. Wuttichai Wongcharoensin 100,000 0.38 0.38 12. Mr.NattaChak Wongcharoensin 104,600 0.40 0.40 13. Mr. Theerawat Wongcharoensin 100,000 0.38 0.38 14. Mr. Tawatchai Wongcharoensin 78,000 0.30 0.30 15. Mrs. Somsuk Wongcharoensin 77,500 0.29 0.29 16. Mr. Suwatchai Wongcharoensin 124,500 0.47 0.47 17. Ms.Ratchanee Wongcharoensin 90,250 0.34 0.34 18. Mr. Kitichai Wongcharoensin 91,000 0.34 0.34 19. Mr.Veerachai Wongcharoensin 175,870 0.67 0.67 20. Mr.Napatthawat - - - Wongcharoensin 21. Mr. Manit Wongcharoensin 439,500 1.66 1.66 22. Mrs.Payao Wongcharoensin 158,500 0.60 0.60 23. Mr.Itsara Wongcharoensin 125,300 0.47 0.47 2. Mr. Chen Jui-Ying 2,834,700 10.74 10.74 3. Thai NVDR Co.,Ltd 2,188,590 8.29 8.29 4. Mr. Chen Rui-Teng 939,782 3.56 3.56 5. Mr. Lai Chi-Hsiang 657,057 2.49 2.49 6. Mr. Kuo Shih-Lun 511,141 1.94 1.94 7. Ms.Walairat Silpcheewakijja 464,990 1.76 1.76 8. Mr.Vichian Srimuninnimit 407,800 1.54 1.54 9. Mr.Worakarn Wilaichon 230,000 0.87 0.87 10. Mr.Jumphon Thamtanasakul 215,000 0.81 0.81 11.