Notification | Closed
Proposed Acquisition by Japan Pulp and Paper Company Limited of Spicers Paper (Singapore) Pte Ltd
17 October 2018
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Reference: | CCCS 400/009/18 |
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Notifying Parties: | Japan Pulp and Paper Company Limited |
Notifying Date: | 16 October 2018 |
Summary of transaction: | (i) the names of the merger parties; a. Japan Pulp and Paper Company Limited ("JPP") |
(ii) a description of the transaction; The Proposed Transaction will involve JPP acquiring 100% of the issued shares of Spicers Singapore from the Seller ("Proposed Transaction"). As such, JPP will, following completion of the Proposed Transaction, hold and control 100% of the issued shares of Spicers Singapore. | |
(iii) a description of the business activities of the merger parties worldwide and in Singapore; JPP JPP is a global business specialising in the wholesale distribution of paper, paperboard and related products, with operations in Japan, Asia, Oceania, the Americas and Europe. JPP's operations in Australia are carried out by (a) its Australian agent subsidiary, Japan Pulp & Paper (Australia), which is primarily involved in the supply of paper and related products, sourced from various paper mills all over the world mainly to local paper merchants, and (b) its Australian paper merchant subsidiary, Ball & Doggett Group, which is primarily involved in the distribution of paper and related products within the local market (e.g. printing companies, packaging companies, etc.). JPP is also involved in the manufacture of containerboard, household paper and packaging products, with facilities located in Japan, Indonesia and Vietnam. Additional information on JPP is available at https://www.kamipa.co.jp/eng/company/. In Singapore, JPP's wholly owned subsidiary, JPP Far East (S) Pte. Ltd. ("JPPFE") is a distributor of office papers, offset printing papers, specialty papers, synthetic papers and related products. JPPFE distributes paper to customers from varied industries, ranging from printers, educational institutes, ministries, banks, copy centres and walk-in individuals. JPPFE also imports paper from countries which include Japan, Korea, China, Europe, and Indonesia. Additional information on JPPFE is available at http://jpp.com.sg/about-us/. Spicers Singapore Spicers Singapore is a wholesale distributor of paper and other visual communication materials, including papers for digital printing and products for Sign & Display. Spicers Singapore's products include recycled paper and paper from sustainable sources as certified by PEFC[1] and FSC.[2] Additional information on Spicers is available at http://spicersasia.com/. [1] "PEFC" refers to Programme for the Endorsement of Forest Certification, which is an international non-profit, non-governmental organization dedicated to promoting Sustainable Forest Management (SFM) through independent third-party certification. [2]“FSC” refers to the Forest Stewardship Council (see http://ic.fsc.org/en) | |
(iv) a description of the overlapping goods or services, including brand names; (1) JPP has submitted that the overlapping goods sold by Parties consist of: (a) Coated Paper; (2) JPP has submitted that the brands of Coated Paper sold by the Parties in Singapore are as follows: JPP (a) Gold East (Gloss/Matt); Spicers Singapore (g) Goldeast Gloss & Matt; (3) JPP has submitted that the brands of Uncoated Woodfree Paper sold by the Parties in Singapore are as follows: JPP (a) A-print Woodfree; Spicers Singapore (a) April; (4) JPP has submitted that the brands of Coated Board sold by the Parties in Singapore are as follows: JPP For 1 sided Coated Board: For 2 sided Coated Board: Spicers Singapore For 1 sided Coated Board: For 2 sided Coated Board: (5) JPP has submitted that the brands of Copy Paper/PPC sold by the Parties in Singapore are as follows: JPP (a) April Paperone All Purpose; Spicers Singapore (g) Double A; (6) JPP has submitted that the brands of Carbonless Paper by the Parties in Singapore are as follows: (a) JPP: Japan CCP; (7) JPP has submitted that the brands of Synthetic Paper by the Parties in Singapore are as follows: (a) JPPFE: Yupo Synthetic Paper; | |
(v) a description of substitute goods or services; Printing and Communications Paper Products JPP has submitted that from the demand-side, Coated Paper, Uncoated Woodfree Paper and Copy Paper are substitutable for each other to a certain degree, depending on the customer's intended applications for the paper product. In addition, other grades and types of printing and communications paper are also substitutable for each other to a certain degree. In particular, there is competition between different grades and types of paper depending on factors such as price and trading terms. Paperboard Products JPP has submitted that Coated Board such as coated white-top testliner, is substitutable with uncoated white-top testliner to a certain degree, depending on the customer's intended applications for the board product. However, board products are generally not substitutable for paper products. Although there are no real differences in the coating operations for paper and board, board products are not substitutable for paper products as board products are thicker and have different applications from paper products. Carbonless Paper JPP has submitted that while Carbonless Paper has characteristics distinct from other types of printing and communications paper, the importance and usefulness of its main purpose (i.e. physical replication of documents) has been diminished given developments in technology. For example, businesses no longer need to rely on Carbonless Paper for physical replication of documents such as invoices and this is evidenced by the fall in demand for carbonless paper over recent years. In respect of all the products described above, JPP has submitted that customers are generally able to switch suppliers and brands easily. According to JPP, the price differential between different suppliers and brands is very small, and almost negligible, which is largely due to the ability of customers to easily conduct price comparisons across the various paper distributors before making a purchase. Pricing is transparent, and customers are even able to obtain information directly from paper mills. | |
(vi) the applicant’s views on:
JPP has submitted that the Parties would remain constrained by, and subject to strong competition from, existing competitors and potential entrants after the completion of the Proposed Transaction, because: (a) the relevant markets are fragmented, with many competitors; (b) end-customers have an abundance of alternative distributors, including both paper merchants and paper mills (and their agents in Singapore) to choose from given the price transparency of paper products. In addition, the cost of switching is very low, enabling customers to switch suppliers easily; (c) competitors can react quickly to any changes in price, output or quality, as supply-side substitution is sufficiently strong, thereby posing significant competition to the Parties; and (d) although there have not been new entrants recently, paper mills overseas have become more active in recent years and have been actively looking to expand into different geographical locations. As such, the threat of entry by potential entrants would also serve to constrain the Parties' conduct. As such, JPP has submitted that the Proposed Transaction will not cause a substantial lessening of competition in any of the relevant markets in Singapore. | |
Decision: | The proposed merger, if carried into effect, will not infringe the Section 54 prohibition. |
Decision Date: | 27 November 2018. Read Media Release. Read the Grounds of Decision. |