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Thailand's top paint producer said to weigh US$400 million IPO

[BANGKOK] TOA Group, controlled by Thailand's Tangkaravakoon family, is considering an initial public offering of its paints and chemicals business, people with knowledge of the matter said.

The company, which is Thailand's No 1 paint producer, is working with banks on a possible share sale that could raise at least US$400 million, one of the people said. A listing could take place on the Thai stock exchange next year, according to the person, who asked not to be identified as the deliberations are private.

TOA Group could use the proceeds to expand in the growing market for paint products in Asia Pacific, after retail paint sales to consumers in the region rose 39 per cent in the five years through 2015 to reach US$13.5 billion, according to Euromonitor International.

Initial public offerings in Thailand have raised US$2.5 billion over the past year, down from US$5.3 billion in the previous 12 months, data compiled by Bloomberg show.

TOA Group started in 1957 as a small, family-owned hardware shop in Thailand and began producing shellac the next year. It now sells products such as "SuperShield" sealers, "Duraclean" paints and "NanoShield" anti-bacterial coatings through its operations in countries across South-east Asia including Cambodia, Indonesia, Malaysia and Vietnam.

The company was the top paint retailer in Thailand in 2015, with a market share of more than 50 per cent, according to Euromonitor.

It has joint ventures with Tokyo-based Chugoku Marine Paints Ltd, which makes coatings for the bottom of ocean vessels, and Japan's Union Paint Co, whose products are used for wood finishing, according to its website. Its chemicals business makes all-weather adhesives for plywood and automobile coatings for rust prevention, the website shows. 

TOA Group hasn't made a final decision to pursue the offering, and plans could change or be delayed, according to the people. An assistant to TOA Group Chief Executive Officer Vonnarat Tangkaravakoon said he wasn't available to comment. The company didn't immediately respond to a request for comment sent through a contact form on its website.

BLOOMBERG