Scientex flexible plastic packaging business delivers strong growth
KUCHING: Global packaging manufacturer and leading property developer Scientex Bhd (Scientex) continued to deliver strong growth in its flexible plastic packaging (FPP) business on increasing export sales.
The group’s manufacturing segment posted revenue growth of 10.8 per cent to RM456.4 million in the second quarter ended January 31, 2018 ( 2Q18), from RM411.9 million a year ago.
“Our manufacturing segment performed commendably as we stamped our mark with more orders from our regional clientele and recorded steadily increasing capacity utilisation. The sustained growth validates the recently completed expansions to our capacity and product range, which allows us to capture more opportunities in the increasing global FPP market especially in high-growth Asia.
“The upcoming integration of Klang Hock Plastic Industries Sdn Bhd (KHPI) into our operations will give us a further boost and bolster our competitive edge in the global FPP market. We also stand to benefit from great synergies such as in operational efficiency and product innovation initiatives.
“Going forward, we are confident of maintaining this uptrend in Malaysiaandregionally.Thiswould be supported by our commitment to deliver high quality products at competitive prices, bringing greater value to our customers,” Scientex managing director Lim Peng Jin said.
The manufacturing segment saw export contribution rise 16.2 per cent to RM354.9 million in 2Q18 from RM305.4 million previously.
Meanwhile, the group’s property development segment revenue grew 2.3 per cent to RM178.3 million in 2Q18 from RM174.3 million last year, attributed to resilient demand for the group’s on-going affordable developments in Johor, Melaka and Perak.
The group’s ongoing and future property development projects reached RM10 billion in gross development value (GDV) in 2Q18 compared to RM8.1 billion earlier. The group also has unbilled sales of approximately RM500 million to be recognised over the next three years.
With improved revenue contribution for both segments, the group’s 2Q18 revenue rose 8.3 per cent to RM634.8 million from RM586.2 million previously, while net profit rose 4.3 per cent to RM68 million from RM65.2 million a year ago.
Cumulatively, revenue for first half ended January 31, 2018 (1H18) increased 15.4 per cent to RM1.29 billion from RM1.12 billion in the previous corresponding period. 1H18 net profit expanded 19.7 per cent to RM140.4 million from RM117.2 million last year.
On prospects for the near term, Lim said that the group is eyeing continued growth in both its manufacturing and property operations in financial year 2018 (FY18).
“For our manufacturing segment, we are confident of achieving stronger performance going forward, buoyed by increasing global demand. We have made commendable progress in securing new customers and larger orders thus far, and are poised to fill up our capacities for the rest of the year,” Lim said.
“Also, with our property development segment noting encouraging new sales performance, the Group is also looking to launch RM600 million worth of new properties for 2H18 to cater to increasing demand for affordably priced homes in the country.”
Scientex is also in the process of acquiring Klang-based KHPI, a leading domestic and regional manufacturer of FPP with annual revenue of close to RM400 million.
KHPI’s products include shrink films, polyethylene films, tubes and bags, lamination films, stretch films, stretch hoods, agriculture films, and flexitank films.
The acquisition of KHPI for RM190 million is immediately value accretive once completed in the second quarter of calendar year 2018. The acquisition would boost the group’s production capacity by approximately 30 per cent to 455,000 metric tonnes (MT), from 356,000 MT currently and will improve its product mix and global market share.