Scientex eyes further growth in consumer packaging

Scientex eyes further growth in consumer packaging
Business & Markets 2014
Written by Wei Lynn Tang of theedgemalaysia.com
Friday, 21 March 2014 10:56

KUALA LUMPUR: Scientex Bhd seeks to tap further into the growing consumer packaging market regionally, as it consolidates all its packaging business under its wholly-owned subsidiary Scientex Great Wall Sdn Bhd.

Scientex said following its acquisition of Seacera Polyfilms Sdn Bhd on Feb 13, it will inject all its consumer packaging operations including Seacera Polyfilms into Scientex Great Wall to lead growth in the business.

“While we continue to chart commendable performance in our manufacturing segment, we are now setting the foundation for our next growth phase via the strategic consolidation of our consumer packaging division under a single platform of Scientex Great Wall,” Scientex managing director Lim Peng Jin said in a statement yesterday.

“This does not only enable us to be a one-stop consumer packaging solution provider, but also enhances our visibility as a leading integrated consumer flexible packaging player,” he said.

Scientex bought Great Wall Plastics Industries Bhd and GW Packaging Sdn Bhd from GW Plastics Holdings Bhd in January last year.

Great Wall Plastics produces polyethylene films, while Seacera Polyfilms manufactures biaxially oriented polypropylene films. Both films form the inner and outer layers of consumer flexible packaging.

For the second quarter ended Jan 31, 2014 (2QFY14), the group reported a 32.5% increase in net profit to RM33.9 million from RM25.6 million, while revenue rose 41.5% to RM383.5 million from RM271.1 million a year ago.

Scientex attributed the better quarterly performance to its manufacturing division, whose pre-tax profit rose to RM16 million from RM10.6 million a year ago. This was due to higher export demand in the Asia-Pacific region for the group’s stretch film as well as full-quarter contributions from consumer packaging products.

In addition, the expanded capacity of stretch film to 194,000 tonnes per year in December 2013 also contributed to growth in the manufacturing segment, propelling Scientex to be one of the top three stretch film producers globally.

Its property division recorded a 22.5% increase in 2QFY14 revenue to RM95 million from RM77.6 million a year ago, buoyed by positive response to new launches and higher progress billings from existing projects in Pasir Gudang, Kulai and Skudai in Johor and Ayer Keroh in Melaka.

For the six months ended Jan 31 (1HFY14), Scientex’s net profit rose 25.3% to RM63.3 million from RM50.5 million, while revenue jumped 46% to RM748.3 million from RM512.7 million a year ago.

The growth was driven by its manufacturing division, whose revenue rose to RM577.7 million from RM366.2 million in 1HFY13. Scientex has manufacturing facilities in Malaysia and Vietnam, and exports more than 80% of its products to over 60 countries worldwide.



This article first appeared in The Edge Financial Daily, on March 21, 2014.