Consumer packaging expert taps strategic partners

Leading industrial packaging manufacturer, Scientex Berhad, is poised to be a major consumer packaging supplier in the Asia Pacific region, with its ongoing and planned capital expenditure (CAPEX) of RM300 million over three years to expand PE and BOPP film production capacity, as well as enter the new market of CPP film production.  Mr. Lim Peng Jin, Managing Director of Scientex Berhad talks about this major move with International Plastics News for Asia (IRNA).

 

IRNA: Please provide a brief background of Scientex Berhad and its operations.

Mr. Lim: Scientex Berhad (Scientex) is a leading industrial packaging manufacturer and a reputable property developer in South Malaysia. Scientex is also the largest stretch film producer in Asia and one of the top three globally with a production capacity of 194,000 metric tonnes (MT) annually. 

 

Established in 1968 as a PVC cloth and leather manufacturer, Scientex today produces stretch film, consumer packaging (PE film and BOPP film), PP strapping bands, polypropylene (PP) and polyethylene (PE) woven and laminated bags, raffia tapes, flexible intermediate bulk containers (FIBC), polyurethane (PU) adhesives and polymer materials such as TPO and PVC sheets for automotive interior parts and solar encapsulant films.  To date, Scientex has manufacturing facilities in Malaysia and Vietnam; as well as sales and marketing arms in Japan and Indonesia. Approximately 75% of manufacturing products are exported to over 60 countries worldwide.  

 

Scientex’s property arm has township development projects in Pasir Gudang, Kulai, Skudai and Senai, all in Johor, and in Ayer Keroh, Melaka. Its township developments are the 1,100-acre Taman Scientex Pasir Gudang, the 250-acre Taman Scientex Kulai I, the 48.4 acre Taman Scientex Kulai II, the 150-acre Taman Mutiara Mas, Skudai; the 250-acre mixed development of Taman Scientex Senai in Johor and the 137-acre Taman Muzaffar Heights in Ayer Keroh. To date, Scientex has delivered more than RM1.5 billion worth of properties and has projects-in-hand of RM1.2 billion. 

Mr. Lim Peng Jin, Managing Director, Scientex Berhad

 

IRNA: What is Scientex’s latest project and how would this affect the company’s overall operations?

Mr. Lim: Scientex would construct a world-class BOPP film manufacturing plant in Pulau Indah, Port Klang, in collaboration with Japan’s largest BOPP film producer Futamura Chemical Co., Ltd (Futamura). Following Scientex’s earlier acquisition of Seacera Polyfilms Sdn Bhd – one of Malaysia’s major producers of BOPP film – the new plant would expand Scientex’s production capacity by 10 folds from the current 6,000 MT per year to 60,000 MT per year upon its completion in 2016. 

 

In addition, Scientex will enter into the new market of CPP film manufacturing with annual production capacity of 12,000 MT per annum by 2015. Scientex is currently expanding its PE film production output in Rawang from 24,000 MT to 48,000 MT per annum by end-2014. 

 

IRNA: What are the target markets for this expansion project?

Mr. Lim: BOPP (biaxially oriented polypropylene), PE (polyethylene) and CPP (cast polypropylene) films are used in the flexible packaging of food and beverages (F&B). BOPP and PE film form the protective outer and inner layers of packaging respectively, while CPP film is widely used as the sealing layer in laminated flexible packaging. 

 

IRNA: How would this expansion be financed?

Mr. Lim: The RM300 million CAPEX, to be invested over three years to 2016, will be undertaken by Scientex Great Wall Sdn Bhd (SGW, formerly known as GW Packaging Sdn Bhd), Scientex’s wholly-owned subsidiary for the consumer packaging business.  To finance this, SGW will issue 10 million new shares to increase its share capital from 90 million shares to 100 million shares. Scientex and Futamura would inject capital of RM40 million each to acquire five million shares representing 5% equity stake in SGW.  Futamura’s participation via equity stake in SGW reflects the long-term perspective adopted by both parties to jointly grow our consumer packaging business in Asia Pacific. We are certainly exploring further collaborations beyond base film into other aspects, such as barrier film capability and other high functional films.”

 

IRNA: What the the benefits of your partnership with Futamura? 

Mr. Lim: The F&B flexible packaging market can only grow larger with increasing urbanisation and economic development in the region. This alliance with Futamura in SGW reinforces Scientex’s position as an all-round and reliable partner to support the expanding requirements of packaging manufacturers in Malaysia and the region. 

 

Futamura, incorporated in 1950, is a leading consumer packaging market player in Japan. It is involved in the manufacture of various types of films including polypropylene film, linear low-density polyethylene film, polyester film, cellulose film and non-film based products such as non-woven fabric, fibrous casing, activated carbon, phenol resin laminate sheets and saccharine products. Futamura would be involved in the construction of the new BOPP plant in Port Klang, incorporating the concept of Japanese quality management in order to minimise investment cost and simplify facility management. In this way, SGW will manufacture BOPP films complying with Japanese quality at Southeast Asia’s production cost. With the 18,000MT BOPP films imported from SGW, Futamura would account for more than 35% of Japan’s annual import market of 48,000MT.  

 

Futamura will also conduct a research on the appeal of high-functional films (e.g. sealants for retort food, in-mould labels, easy-cutting films, non-powder LLDPE sealants, high-barrier films) developed for the Japanese market in Southeast Asia, using Scientex’s sales network. Cellulose films, in which Futamura has the world’s second position, are widely used not only in Japan but also in Southeast Asia for tapes, pharmaceutical packaging and food packaging. Futamura aims to expand its share by leverage on Scientex’s sales network. 

 

 

IRNA: Scientex has also been partnering with other global leaders in various sectors. What are these?

Mr. Lim: Scientex is also committed to partnering with global leaders in their respective sectors to accelerate the Group’s business expansion.  Scientex signed purchase agreements with three international machinery suppliers, namely Japan Steel Works, Ltd (JSW), Reifenhäuser GmBH & Co (Reifenhäuser), and Windmoeller & Hölscher (W&H).

 

JSW will provide the newest state-of-the-art machinery to SGW for the production of BOPP film, which is expected to achieve higher-performance BOPP film at a wider and higher speed than JSW’s previous model.  Reifenhäuser is Scientex’s partner for the production of CPP film. Commanding the technology designed for highest precision, flexibility and efficiency, Reifenhäuser is building two 5-layer cast film lines for the production of lamination film and metallisable film for SGW. Reifenhäuser will also install the most advanced components like the Reicofeed 2.1 feedblock into its machinery for SGW. The technology enables to achieve excellent film qualities and thickness tolerance. The distribution of layers can also be adjusted during running production. Designed for a maximum net film width of 3250 mm and an output of up to 1288 kg/h, each line will produce about 300 meter of film per minute. 

 

W&H is a manufacturer of technologically advanced machines for the production and conversion of flexible packaging materials, comprising blown and cash film extrusion lines, flexo and gravure printing presses as well as converting machines for industrial sacks made of paper, PE-films, PP-wovens and composites. Having already supplied Scientex with six units of the three-layer blown film line OPTIMEX, W&H will continue its long-standing relationship with Scientex by providing the latest machinery for PE film production, including South East Asia’s first 9-layer blown film line called the VAREX II. W&H will also provide SGW with one unit of the CI flexographic printing press MIRAFLEX CM 10 – also the first to be deployed in Southeast Asia. It is notable that the latest MIRAFLEX CM 10 would be Scientex’s fourth W&H printing press in its premises. 

 

Scientex Berhad

Tel: +603 5519 1325

E-mail: info@scientex.com.my

Website: www.scientex.com.my/