SCGM allocates RM20m capex for first plant in Klang Valley

PETALING JAYA: Thermoform food packaging manufacturer SCGM Bhd has set aside some RM20 million in capital expenditure (capex) for its first manufacturing facility in the Klang Valley to capture more market share in the region.
SCGM said in a statement that the 47,000 square feet factory, housed in rented premises in Telok Panglima Garang, Klang would produce thermoform lunchboxes for the Klang Valley market.
With four thermoform machines and two extruders, the factory, which is expected to start operations by end-2017, would have a production capacity of 5 million kilogram (kg) per annum.
SCGM managing director Datuk Seri Lee Hock Chai noted that the sales of the group's 'Benxon'- brand lunchboxes had jumped to RM15.3 million in the financial year ended April 30, 2017, from RM200,000 a year ago.
"Besides benefiting from the implementation of the ban on polystyrene packaging, we were also able to fulfil the demand uptrend due to our existing distribution network in Klang Valley. The new factory will not only increase our thermoform lunchbox production capacity but also reduce delivery time to our customers and lower logistics costs," he said.
At present, SCGM's factories are located in Kulai, Johor, with a total production capacity of 36 million kg per year across various products including lunchboxes, food and medical trays.
With the addition of the Klang Valley factory, production capacity will increase to 41 million kg per year by end-2017.
Meanwhile, SCGM received shareholders' approval for the proposed one-for-three bonus issue of 48.4 million shares and the two-for-15 bonus issue of 19.36 million warrants at its EGM today.
At an indicative exercise price of RM4.05, the warrants exercise would potentially raise up to RM78.4 million in gross proceeds.
SCGM shares closed unchanged at RM4.13 on some 256,100 shares traded, bringing it a market capitalisation of RM599.68 million.