Industrial packaging manufacturer Scientex Berhad invests its ongoing and planned capital expenditure (CAPEX) of RM300 million (US$91.6 million) over three years to 2016 to expand polyethylene (PE) and biaxially oriented polypropylene (BOPP) film production capacity, as well as enter the new market of CPP film production.
Scientex would construct a BOPP film manufacturing plant in Pulau Indah, Port Klang, in collaboration with Japan’s BOPP film producer Futamura Chemical Co., Ltd (Futamura).
Following Scientex’s earlier acquisition of Seacera Polyfilms Sdn Bhd – one of Malaysia’s major producers of BOPP film – the new plant would expand Scientex’s production capacity by 10 folds from the current 6,000 metric tons (MT) per year to 60,000 MT per year upon its completion in 2016.
In addition, Scientex will enter into the new market of cast polypropylene (CPP) film manufacturing with annual production capacity of 12,000 MT per annum by 2015. Scientex is currently expanding its PE film production output in Rawang from 24,000 MT to 48,000 MT per annum by end-2014.
BOPP, PE and CPP films are used in the flexible packaging of food and beverages (F&B).
BOPP and PE film form the protective outer and inner layers of packaging respectively, while CPP film is widely used as the sealing layer in laminated flexible packaging.
“Our primary objective would be to achieve cost-efficient production across a wide range of consumer films, so that our customers in the F&B manufacturing sector would benefit from lower-cost input prices. Indeed, we regard this investment as not only advantageous to Scientex, but also an industry game changer that will enable manufacturers fulfil the ever-growing demand for consumer packaging,” says Scientex’s MD Lim Peng Jin.
The RM300 million CAPEX will be undertaken by Scientex Great Wall Sdn Bhd (SGW, formerly known as GW Packaging Sdn Bhd), Scientex’s wholly-owned subsidiary for the consumer packaging business.
SGW will issue 10 million new shares to increase its share capital from 90 million to 100 million shares.
Scientex and Futamura would inject capital of RM40 million each to acquire five million shares representing 5% equity stake in SGW.
Futamura is entitled to purchase up to 20% issued shares of SGW over the next five years.
“The F&B flexible packaging market can only grow larger with increasing urbanisation and economic development in the region. This alliance with Futamura in SGW reinforces Scientex’s position to support the expanding requirements of packaging manufacturers in Malaysia and the region,” says Lim.
