BP Plastics invests in SML line; to boost exports

Malaysian film maker BP Plastics Holdings Bhd (BPP), reportedly one of the largest PE film makers in Asia, is ramping up its production with a RM13.5 million investment in a new 3 m cast stretch film machine from SML Austria, according to a StarBiz report. The SML line is the SmartCast, launched at the K show in 2013, which is a modular system with four pre-configured extrusion units at output of up to 3,000 kg/hour and the choice between five or seven layers.

Group Managing Director Lim Chun Yow said that with the commissioning of the machine in June at the company’s Batu Pahat, Johor, plant it expects to boost its export sales to 80% for the financial year 2015, up from last year’s 78%. The group has a second plant located within the vicinity bringing the combined total size of both plants to 295,000 sq ft.

The bulk of BPP’s exports is in US dollars, followed by SGD and Euro, thus the investment the company has made in a climate of economic uncertainty. The domestic market contributes to 20% of the public-listed BPP’s turnover.

BPP’s combined capacity for stretch films and packaging is almost 60,000 tonnes/year, according to market reports.

Meanwhile, BPP says it achieved the highest revenue of RM283.96 million in FY2014, since its listing on the Main Board of Bursa Malaysia Securities in 2005, an increase of 17.8% as compared to a revenue of RM241 million in FY2013. It said its success was due to its focused efforts in the highest growth markets of the Asia Pacific region, whilst strengthening its presence in the domestic market, with the export sales lifted to 78% as compared to 77% in FY2013.

For the first half of 2015, net profit was up 22% to RM7.8mil against a revenue that fell 9.4% to RM134 million. The group said the better earnings was boosted by lower resin costs, but the lower revenue was due to lower domestic market sales impacted by the implementation of the 6% goods and services tax (GST) and the weakening local currency (Ringgit or RM).

Lim also told Starbiz that demand from countries like Japan, South Korea and China had slowed down and that BPP is on the look out for new markets.

Aside from Japan (its largest export market), South Korea and China, BPP’s key export markets include Singapore, Australia, the Middle East and Europe.

The company specialises in stretch and shrink films for palletising as well as PE packaging film and bags. It is one of the top three stretch film producers in the country.