SCGM to spend RM11.6m capex for new business venture

PETALING JAYA: Thermo-vacuum form and vacuum plastic packaging manufacturer SCGM Bhd has set aside RM11.6 million in capital expenditure (capex) to expand into a new segment of plastic cup manufacturing by year-end.
In a statement released last Friday, its chairman cum managing director Datuk Seri Lee Hock Seng said the capex will be used to buy machineries and construct a new plant located in Johor Baru, which is expected to be operational by year-end.
The capex for then new plastic cup production line, that has the capacity to manufacture 700 cups per minute or equivalent to 1 million cups daily, will be financed by internally generated funds and borrowings.
SCGM's new business venture will complementary to its current product range of disposable plastic trays, mainly for the food, electronics, and medical sectors.
"Entering the new market of manufacturing plastic cups not only expands our product range, but also leverages on our existing relationships with customers in the food and beverage industry. With our track record for quality and delivery, we have secured orders for more than half of our plastic cup production capacity to date," he said.
He added that the group is also looking to export plastic cups abroad such as Japan and China besides supplying to the local market.
For the first quarter ended July 31, SCGM's net profit went up 13.3% to RM3.54 million against RM3.13 million in the previous corresponding period, due to higher sales from the domestic market in light of the Hari Raya festivities and increased demand from Australia.