SCGM to increase exports; strengthening dollar helps revenues

Malaysian manufacturer of thermo-vacuum form and vacuum plastic packaging, is eyeing more than 50% revenue contribution from export markets within the next two years. For the financial year ended 30 April 2015 (FY2015), 46% of group’s revenue was derived from overseas markets.

The group via its wholly-owned subsidiary Lee Soon Seng Plastics Industries, manufactures thermovacuum form plastic packaging and extrusion sheets. Based in Johor, SCGM produces thermo-vacuum formed plastic packaging for the food, medical, electronics and other sectors for customers in Malaysia and across the globe. In March 2015, the group began manufacturing plastic cups.

SCGM has noted exports increasing at a quicker pace compared to local sales, expanding from RM29.6 million to RM49.2 million between its financial years ended 30 April 2011 to 2015. On compounded annual basis, revenue from export markets grew 13.6% per annum in the same period.

“We have supplied our food packaging in increasing measure to direct customers and distributors in Southeast Asia and Australia, and thus built our track record of delivering high-quality products. Now that we have commenced production of plastic cups since June 2015, we have a wider and complementary product range to fulfil the regional demand. Among the new markets we are selling our plastic cups to include Indonesia, Pakistan, Myanmar and the Philippines,” said Dato’ Sri Lee Hock Seng, Chairman/Managing Director of the public-listed SCGM.

He went on to say that the weaker Malaysian Ringgit against the US Dollar and lower input costs due to downtrending fuel prices has enhanced the company’s competitiveness in the global arena.

“Therefore, the group is optimistic of achieving more than 50% revenue contribution from our export markets in two years.”

For SCGM’s first quarter ended 31 July 2015 (1Q16), group revenue increased by 8.7% to RM29.6 million as compared to RM27.3 million a year ago. Export sales jumped 14% to RM13.7 million from RM12.0 million previously, while local sales grew 4.5% to RM16 million versus RM15.3 million. 1Q16 net profit rose 37.9% to RM4.9 million from RM3.5 million in the corresponding quarter last year, on favourable product mix and foreign exchange gain due to the strengthening of the US Dollar.