Scientex expects revenue from consumer packaging to hit RM1b

KUALA LUMPUR: Scientex Bhd expects revenue from its consumer packaging business to quadruple to RM1bil in three years following its strategic partnership and expansion.

The company announced on Wednesday that its unit Scientex Packaging Film Sdn Bhd (SPFSB) had entered into a corporate exercise with Futamura Chemical Co., Ltd which would see it expanding its operations.

Under the exercise, SPFSB would sell five million shares in Scientex Great Wall Sdn Bhd (formerly GW Packaging Sdn Bhd) or a 5% of the enlarged paid-up for RM40mil.

“Futamura Chemical shall be given an option to purchase up to an additional 15% of the issued and paid-up capital of Scientex Great Wall from SPFSB within the next five years from the date of the share sale agreement at a price to be determined by the parties subsequently,” Scientex added. 

Scientex said with the successful acquisition of the Great Wall and Seacera companies in January 2013 and February 2014 respectively, the group has expanded its existing portfolio to various consumer packaging products, in particular the manufacturing of PE and BOPP films. 

“The share sale agreement will enable the group to enter into a strategic alliance with Futamura Chemical to further strengthen its position in the consumer packaging industry,” it said. 

Scientex added the equity participation by Futamura Chemical would enable Scientex Great Wall to build a new world class BOPP film manufacturing plant adhering to stringent Japanese standards and quality in Malaysia with lower Southeast Asian manufacturing costs. 

Scientex Great Wall would purchase state-of-the-art BOPP film production lines to expand its existing BOPP film production capacity and this would involve an investment cost of about  RM170mil for the proposed BOPP film plant. 

It added the construction of this new plant was expected to be completed by the second half of 2016. 

With the proposed expansion, the existing annual BOPP film production output of 6,000 tonnes would be increased to 60,000 tonnes per annum.