Scientex gets nod to buy GW Plastics unit

Shareholders of Scientex Bhd have approved of the company buying up the plastic business of GW Plastics Holdings Bhd for RM283.2 million (USD92.5 million).?

"We are pleased to have received our shareholders' approval for this corporate exercise," said Scientex managing director Lim Peng Jin. ??He said upon completion of the purchase next month, the enlarged Scientex Group's capacity will reach 154,000 tonnes of industrial stretch film and 28,000 tonnes of blown film. ??

Interestingly, Scientex industrial packing business will broaden to include the food and beverage sector, especially in bread packaging. This is because GW Plastic is Asia's largest bread packaging manufacturer.

"We assure the staff of GW Plastics that there will be no voluntary separation scheme. We are on an expansionary mode," he said after Scientex shareholders' meetings here yesterday.

As both Scientex and GW Plastics continue to expand their factories, the enlarged group's total annual stretch film capacity will hit 194,000 tonnes by the end of 2013.

Lim said the merger will be earnings accretive as the enlarged Scientex Group will enjoy better bargaining power with customers that make up one third of the world's stretch plastic market.

Scientex's shareholders approved a final dividend of eight sen per share. It will be payable on January 31 2013.

This will make Scientex's total dividend payout for the year ended July 2012 amount to 14 sen per share, or RM31.1 million.