KUALA LUMPUR: Scanwolf Corporation Bhd (SCB) is eyeing a turnaround in its fourth quarter (Q4) ending June 30 2021, driven by its newly-commenced plastic film manufacturing business and the capacity-maximised plastic edging division.
Scanwolf executive director Ng Chee Wai said due to the Covid-19 pandemic, furniture products such as bedroom set, panel-based office suites and dinette were poised for healthy growth as more people were working from home and the diversion of orders from China to Malaysia due to the US-China trade war.
He said as of Q2, the plastic edging division operated at a maximum capacity of 300 tonnes per month, with a total backlog of 400 tonnes as of December 31 last year.
"This bodes well to the our plastic edging division as we supply to major furniture manufacturers such as Versalink Holdings Ltd, Poh Huat, Signature Kitchen, Lii Henn and Tafi," he said in a statement today.
"It is imperative for us to add new production lines to produce plastic edging for the furniture industry, which would then increase the maximum capacity to 440 tonnes per month," Ng added.
Scanwolf is also completing its rights issue of irredeemable convertible unsecured loan stocks (ICULS) with warrants, targeting to raise up to RM10.5 million.
"This bodes well with the group's expansion plan as the booming demand for furniture show no sign of slowing down. The gradual reopening of the economy in the developed markets has driven a pent-up demand in various sectors, including furniture goods, which will continue to drive demand for the plastic edging division," the company said.
Its newly-commenced plastic film manufacturing business in March 2021 had gained traction by receiving overwhelming inquiries from its potential customers.
The company said it would focus on providing packaging solutions to higher-margin industries such as pharmaceutical and food and beverage (F&B).
With all the business strategies in place, it is confident of turning around in Q4 compared to the RM1.1 million loss in the corresponding quarter in 2020.
"Looking ahead, we are confident of a bullish earnings outlook for the group, driven by both the expansion of its capacity in the furniture industry under its plastic division as well as the scaling of its packaging industry.
"The group has set an internal target of double-digit growth for both its top and bottom line in financial year 2022 amid the expected 'revenge spending' in developed markets," it said.