KUALA LUMPUR: Scientex Bhd’s fourth quarter profit has increased substantially amid the move by the packaging manufacturing group to forge a strategic alliance with Japan’s Futamura Chemical Co Ltd (FCC).
Scientex yesterday said its fourth quarter pre-tax profit for the year ended July 31 2014 rose 39.3 per cent to RM56 million from RM40.2 million in the preceding quarter.
Scientex’s unit Scientex Packaging Film Sdn Bhd yesterday sealed a share sale agreement with FCC to sell five million new shares in Scientex Great Wall Sdn Bhd (SGW), or five per cent of SGW’s enlarged paid-up capital for RM40 million.
Scientex Packaging will also buy five million new SGW shares similarly for RM40 million.
On completion of the deal, FCC will hold five per cent of SGW, with the rest held by Scientex Packaging.
Scientex managing director Lim Peng Jin said FCC’s equity participation will allow SGW to build a new local biaxially oriented polypropylene (BOPP) film manufacturing plant based on stringent Japanese standards and quality that will lower manufacturing costs.
“SGW will buy modern BOPP film production lines for the expansion of its existing BOPP film production capacity. The proposed BOPP film plant will have an investment cost of about RM170 million.
“The construction of the new BOPP plant is expected to be completed by the second half of 2016. With the new plant, the current BOPP film annual production of 6,000 tonnes will jump to 60,000 tonnes per year,” Lim said after the agreement signing ceremony, here, yesterday.
SGW will also expand its cast polypropylene (CPP) film operations by the commisioning a new CPP plant and production lines costing RM50 million, expected to be operational by the second half of next year.
The new CPP film plant is expected to generate an annual production output of 12,000 tonnes of CPP film.
Both BOPP and CPP films are extensively used in the flexible packaging of food and beverages.
Lim said with the exercise, the group is expected to further develop and grow its consumer packaging market share in Japan and Southeast Asia.