JOHOR-BASED PCCS Group Bhd is negotiating with an international direct marketing company (DMC) to produce apparel and toothbrushes for the China market.
Group general manager Gan Hoe Lian said discussions had been going on for some time and a deal would probably be struck soon.
He said the company’s wholly owned subsidiary, China Roots Packaging Pte Ltd, would produce the goods.
“Our subsidiary has been making and supplying bottles for the DMC and it (the DMC) is pleased with the products,’’ Gan said after the company AGM yesterday.
He said the apparel would initially be sent to distributors in China and would later be offered as part of the DMC’s product line.
Gan said a new plant for China Roots would be operational by the end of this month.
He said PCCS had invested about US$14mil on the plant, which is situated on a 29,835 sq m in Guangzhou Economic and Trade Development Zone.
“The new facility will further strengthen our packaging business in China as part of our diversification strategy,’’ Gan said.
PCCS has, in July 2003, taken over loss-making packaging company, Blopak China Private Ltd, for RM4.02mil.
The company managed to turn around Blopak, which broke even in June 2004, Gan said, adding that the investment had begun to contribute returns earlier than expected.
He said upon completion of the new plant, activities at Blopak would be transferred to China Roots as the former operated from a rented premise.
Gan said PCCS would also set up labels and stickers section to complement the packaging activities of China Roots.
“Customers wanting to label their packages can make use of our services,’’ he said.
For the financial year ended March 31, 2005, PCCS' revenue increased to RM408.13mil from RM304.57mil in the previous year, while pre-tax profit rose to RM13.49mil from RM1.08mil.