SLP tar­gets to sell more plas­tic pack­ag­ing prod­ucts

The Star Malaysia - StarBiz - - News - By DAVID TAN david­tan@thes­tar.com.my

GE­ORGE TOWN: SLP Re­sources Bhd is tar­get­ing to sell 15,500 tonnes of flex­i­ble plas­tic pack­ag­ing prod­ucts this year – a strong sin­gle-digit per­cent­age im­prove­ment over 2016.

Group man­ag­ing di­rec­tor Kelvin Khaw told StarBiz that the group had sold more than 11,000 tonnes of plas­tic pack­ag­ing prod­ucts with a mar­ket value of over RM100mil based on the cur­rent resin prices.

The max­i­mum pro­duc­tion ca­pac­ity of the group is 24,000 tonnes per year.

The price of lin­ear low-den­sity poly­eth­yl­ene (LLDPE) resin is about US$1,180 per tonne, com­pared with an av­er­age of US$1,225 per tonne in the first half of 2017.

“We should reg­is­ter growth in rev­enue over 2016 and our net profit this year should be main­tained at a dou­ble-digit per­cent­age of the an­nual rev­enue due to the in­stal­la­tion of new pro­duc­tion lines.

“The cur­rent resin price of US$1,180 for LLDPE is still higher than last year’s US$1,100, rep­re­sent­ing about 7% in­crease.

“How­ever, de­spite the higher resin prices, we are able to pass only about 4% of the cost to our cus­tomers due to com­pe­ti­tion,” he said.

In 2018, the group tar­gets to raise its rev­enue by 12% to 15%.

Ac­cord­ing to Khaw, the higher rev­enue would be driven by a pro­duc­tion ca­pac­ity which should hit 32,000 tonne per an­num by mid-2018.

“The pro­jected growth in 2018 will have a pos­i­tive im­pact on the net profit. The rev­enue for this year is ex­pected to grow by mod­er­ate sin­gle-digit per­cent­age over 2016.

“In 2016, the group posted about RM168mil in rev­enue,” he added.

The group’s flex­i­ble pack­ag­ing prod­ucts are shipped to Ja­pan, Europe, Aus­tralia, New Zealand, China and other mar­kets in South­East Asia cover­ing food and bev­er­age, health­care, in­dus­trial and con­sumer goods sec­tors.

Khaw also said the group ex­pected pos­i­tive con­tri­bu­tion from China next year.

SLP is ex­pand­ing its pro­duc­tion ca­pac­ity to 32,000 tonnes per year from the present 24,000.

“We will in­stall ma­chin­ery soon for the new plant in Kulim.

“The new plant should be up and run­ning in Jan­uary 2018,” he added.

Ac­cord­ing to a Wise Guy Re­search re­port ti­tled “Flex­i­ble pack­ag­ing – mar­ket de­mand, growth, op­por­tu­ni­ties and anal­y­sis of top key player fore­cast to 2023”, the global flex­i­ble pack­ag­ing mar­ket is ex­pected to reach US$342.85bil by 2023.

“By ma­te­rial, the plas­tic seg­ment in flex­i­ble pack­ag­ing mar­ket ac­counts for the largest mar­ket share and is grow­ing with 6.56% com­pounded an­nual growth rate (CAGR) dur­ing fore­cast pe­riod.

“By ap­pli­ca­tion, food and bev­er­age seg­ment in flex­i­ble pack­ag­ing mar­ket ac­counts for the largest mar­ket share and is grow­ing with 6.12% CAGR dur­ing the fore­cast pe­riod.

“Ge­o­graph­i­cally, Asia-Pa­cific ac­counted for the largest share in global flex­i­ble pack­ag­ing mar­ket fol­lowed by North Amer­ica,” the re­port said.

The re­port added that the boom­ing e-com­merce mar­ket in the re­gion was also con­tribut­ing to the growth of the flex­i­ble pack­ag­ing mar­ket.

“North Amer­ica is the sec­ond largest mar­ket for the flex­i­ble pack­ag­ing. De­clin­ing un­em­ploy­ment lev­els and grow­ing de­mand for pack­aged food are some of the fac­tors driv­ing the de­mand of the mar­ket in this re­gion,” it said.

De­mand ex­pan­sion: The higher rev­enue would be driven by a pro­duc­tion ca­pac­ity which should hit 32,000 tonne per an­num by mid-2018, ac­cord­ing to Khaw.

Newspapers in English

Newspapers from Malaysia

© PressReader. All rights reserved.