SCGM will increase its food packaging capacity

KUALA LUMPUR: Manufacturer of food packaging SCGM Bhd plans to spend RM 20 million on capital expenditure (capex) to expand its food packaging capacity.

The investments, which are allocated for the next fiscal year ending April 30, 2022 (FY22) would be used to purchase extrusion machines and forming machines.

In a statement, the group said its food and beverage (F&B) packaging sales continued to benefit from the new standard of increased deliveries and take-out amid Covid-19 in the third quarter ended. January 31, 2021 (Q3).

SCGM chief executive Datuk Seri Lee Hock Chai (pictured) said higher takeaways amid Covid-19. “

Lee said the capacity expansion is timely for the group to capture growing customer demand in domestic and international markets.

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“As the largest supplier of F&B thermoformed packaging in Malaysia, we believe we have a competitive advantage in finding new customers, especially domestically, alongside overseas markets such as New Zealand, Australia , Singapore, the Philippines and Indonesia. “

Regarding the current upward trend in resin prices, Lee said, “Even as resin prices continue to increase, our position as the largest supplier of F&B thermoformed packaging and price leader allows us to benefit from economies of scale and adjust prices accordingly. “

For the third quarter, the group saw its net profit nearly double to RM 8.1 million from RM 4.2 million a year ago, due to higher group revenue and a favorable product mix as well as lower financial expenses and operating costs incurred as the group consolidated its Telok Panglima Garang factory at its largest factory in Kulai since March 2020.

For the third quarter, the group’s revenue increased 21.1% year-on-year to RM 62.5 million, driven by the strong performance of its F&B segment.

For the nine months under review (9M21), the group saw its net profit almost triple year on year to RM26 million thanks to a favorable sales mix, lower raw material costs and fees. operating and reduced interest.

9M21 revenue increased 12.4% year-on-year to RM 180.8 million due to higher deliveries of F&B packaging and contributions from the new protective equipment segment individual including face masks and face shields.

The group declared a third interim dividend of 2.2 sen per share, payable on April 28, 2021.

With the first and second interim dividends of 1.7 sen and 1.5 sen, SCGM’s total dividend payout for 9M21 is RM 10.4 million or 40.0% of 9M21 net profit.

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