GEORGE TOWN: Thong Guan Industries Bhd
will invest RM40mil to expand its manufacturing facility at a 24-acre site in Sungai Petani, Kedah.
The investment is for four high-capacity production lines, comprising blown film and stretch film lines imported from Europe.
Group executive director Alvin Ang told StarBiz these four lines would raise the group’s production capacity to 265,000 tonnes per annum from 230,000 in 2022.
The installation of the stretch film and blown film lines will be completed, respectively, in mid and end of 2023.
The group is targeting to grow a double-digit percentage in the premium sales market of Europe and North America.
“The group targets to sell more than 30% of its stretch film products to these markets. Japan will continue contributing about 15% this year to our revenue,” he said.
The group invested over RM200mil before the Covid-19 pandemic to set up three production facilities at the new site.
“The land was originally 16 acres, but we increased it to 24 recently with the acquisition of another eight.
“The first plant produces stretch film materials, while the other two courier bags and premium food packaging products,” he said.
The group’s stretch films, courier bags, and premium food packaging materials will drive this year’s growth.
“The other countries important to the group are the Asean, Australia and New Zealand, South Africa, South Korea and Middle East markets, which will contribute about 40% to the revenue,” he said.
Increasingly important is the China market where the group will set up another Newton Research and Development Centre this year, a project established in 2017 to analyse, optimise, solve and innovate load transportation safety concepts.
Ang said the group planned to invest in three warehouses in the East Coast, Mid-West, and West Coats of the United States by the end of 2023.
The group has set up a warehouse cum research and development centre in Denmark to develop and market its new stretch film and other packaging products under the Newton brand name. “The investment was about €1mil (RM4.72mil ) ,” he added.
Thong Guan is expected to achieve double-digit growth in sales for its financial year ending December 2023.According to the Market Research Future report, the stretch and shrink film market will grow from US$16.8bil (RM74.4bil) in 2022 to US$24.4bil (RM108bil) by 2030, registering a 5.5% compound annual growth rate (CAGR).
The report added demand for lightweight materials for industrial packaging expansion would fuel the growth of the worldwide stretch and shrink film market.
The report stated the Asia-Pacific stretch and shrink film market, accounting for US$6.9bil (RM31bil) in 2021, would record a 43.9% CAGR till 2030.
“Due to the rising food and beverage industries, notably in China and India, the region is predicted to dominate.
“Over the projected period, rising consumer disposable income and packaged food demand are anticipated to drive the demand for flexible packaging,” the report said.
