Big move by Rongcheng Paper! Its businesses will be split into three regional subgroups.
Recently, Rongcheng's board approved a major plan to transform into an investment holding company. In the future, the holding company will have three subgroups divided by region: Taiwan, Mainland China, Japan, and other overseas businesses. This structure will make it more flexible and timely to seek investments or M&A opportunities, offering greater growth potential. It also doesn't rule out the possibility of strategic partnerships or going public.
Currently, Rongcheng's revenue contribution from Taiwan and mainland China stands at 16% and 84%, respectively, with the gross margin in Taiwan significantly higher than that in the mainland. The Taiwan operations include the industrial paper business and the carton business, and these operations (including assets, liabilities, and operations) are being entirely transferred to its wholly-owned subsidiary, Rongcheng Low-Carbon Carton Company. Rongcheng itself is transforming into 'Rongcheng Investment Holdings Co., Ltd.,' which will handle the group's overall strategic planning, resource allocation, and external investment arrangements.
For the business split, Rongcheng will transfer its overall operations of the industrial paper and carton business valued at 6 billion yuan in exchange for 1 newly issued ordinary share of Rongcheng Low-Carbon Carton Company for every 30 yuan per share. After the split, Rongcheng Low-Carbon Carton Company will become a wholly-owned subsidiary under Rongcheng Investment Holdings, solely responsible for Taiwan's paper and carton business. The original L&C CO.,(BVI) LTD. and its subsidiaries will handle mainland operations, while Japan Rongcheng and its subsidiaries will handle operations in Japan and other overseas markets.
Rongcheng stated that it hopes this restructuring and transformation will fully leverage management efficiency under a holding platform structure. Each of its core businesses will focus on deeper development in their respective areas, and the company plans to actively bring in strategic partners through strategic investments, joint ventures, or acquisitions to strengthen core advantages and operational momentum. The goal is to enhance the group's long-term competitiveness, focusing on low-carbon papermaking and green packaging, while promoting intelligent manufacturing and international expansion advanced by the use of AI technology.