SCGM warrant hits limit up on news of expansion plans

PETALING JAYA: Johor-based Thermoform food packaging manufacturer SCGM Bhd plans to invest RM133 million over the next two years to set up its first factory in Klang Valley and construct a new one in Kulai, to increase production capacity by 88%.
The company’s warrant SCGM 7247WA hit limit up on the news, surging 30 sen to close at 60.5 sen, even as its share price fell three sen to close at RM3.
The company said in a statement, the rented factory in Klang Valley is expected to begin operations by end-2017, while the new factory in Kulai is to be completed by end-2018. Once both factories are fully operational, the group will have a total production capacity of 67.6 million kg per year.
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 trays and medical trays.
Apart from capacity expansion, SCGM has also embarked on new product development, having introduced its degradable lunchbox range in June 2017.
To create awareness of the product, SCGM is providing degradable lunchboxes to athletes and officials at the arenas of the upcoming 29th Southeast Asian Games and 9th Asean Para Games (KL2017) in August and September 2017. F&B vendors at the event would also purchase the degradable food packaging from SCGM for their stalls.