SCGM allots RM133m in capex for 2 new factories


Thermoform food packaging manufacturer SCGM Bhd is investing RM133 million in two new factories for its expansion plan to meet a higher demand in the local and regional markets.

“To this end, we have allocated RM133 million in capital expenditure (capex) for the two new factories over the next two years. This will result in an 88% increase in production capacity by the end of 2019 and help SCGM achieve sustainable growth going forward,” SCGM MD Datuk Seri Lee Hock Chai said in a statement yesterday.

“We have been growing consistently over the past three decades, and built a strong reputation for delivering quality food packaging both locally and overseas. Now, we are ready for bigger accomplishments, and have put the necessary plans in place.”

The addition of the two new factories will double SCGM’s total production capacity to 67.6 million kg per annum, allowing the company to uplift its market share in central Peninsular Malaysia.

The two-year plan involves the rental of a factory in Telok Panglima Garang in Klang, which is slated to commence operations by end-2017, and the construction of a new factory in Kulai, Johor.

Currently, the Kulai-based plastic manufacturer has a total production capacity of 36 million kg per year across various food and beverage packaging products.

Between 2012 and 2016, the company’s turnover grew 62.2%, from RM82.1 million to RM133.2 million, while net profit expanded 260.7% from RM5.6 million to RM20.2 million.

With the anticipation of more states to ban the use of polystyrene as food packaging in Malaysia, the demand for plastic food trays and other degradable food packaging products is expected to rise and contribute further to SCGM’s income.

Apart from the capacity expansion, SCGM is developing new products after the company introduced its degradable lunch-box range in June this year.

The industrial producer is also expected to gain from the upcoming 29th South-East Asian Games (SEA Games) and the 9th Asean Para Games (KL2017) in August and September respectively as vendors at the event will be using degradable food packages made by SCGM.

“We are pleased to be the silver sponsor of the KL2017 and want to play our part in promoting eco-friendly practices on a day-to-day basis. We also believe that this will be a boost for our degradable lunchbox range going forward,” Lee added.

Additionally, SCGM is also one of the sponsors for the “One Medal One Tree” initiative, where 5,249 trees will be planted by the Malaysian Organising Committee for the SEA Games, representing the number of medals available to be won.

SCGM shares went as high as RM3.08 yesterday before closing 0.33% lower at RM3.02. Some 218,000 shares were traded, giving SCGM a market capitalisation of RM584.7 million.