Malaysian industrial stretch film producer Scientex has invested $91.97m in the next three years to expand into the Japanese and South-East Asian market for its consumer packaging products.
The company will use the money to expand its polyethylene (PE) and biaxially-oriented polypropylene (BOPP) film production capacity and enter cast polypropylene (CPP) film manufacturing.
Scientex chairman Tan Sri Mohd Sheriff Mohd Kassim said that the formation of a joint venture company Scientex Greatwall Sdn Bhd (SGSB) with Japan's Futumura Chemical will contribute positively to the company's earnings in the coming financial year.
He further said that the company will allocate $24.53m (RM80m) for the PE film production, $52.13m (RM170m) for BOPP film production and $15.33m (RM50 million) for CPP.
The Malaysian Reserve quoted Kassim as saying: "The global sale for consumer packaging products in this region is estimated to be worth in excess of $70bn (RM226.96bn) per year and as such, I am optimistic this partnership will open up opportunities for both parties."
The group will build its BOPP film manufacturing plant in Pulau Indah, Port Klang, in collaboration with Japan's largest BOPP film producer, Futamura Chemical. It will help in increasing Scientex's production capacity by ten times from the current 6,000 tonnes per annum to 60,000 tonnes per annum upon completion by 2016.
The CPP film manufacturing plant which is expected to be completed by 2015 will have an estimated annual capacity of 12,000 tonnes.
The current expansion of its PE film production output in Rawang from 24,000 tonnes to 48,000 tonnes will also be completed by the end of 2014.
While the expansion production capabilities will be funded internally, the company has signed purchase agreements with three international machinery suppliers, Japan Steel Works, Reifenhauser Group and Windmoeller & Holscher.
Scientex is expecting a turnover of $0.31bn by 2016 and hopes to increase its share in the Asian market by 5%-10% from the current 30%. The company also said that for the nine-month period of financial year 2014, its earnings grew by 25% year-on-year (YoY) to $30.66m (RM100 million) which could be achieved because of an improved performance in its manufacturing and property segments.
