KUALA LUMPUR: Thermoform food packaging manufacturer SCGM Bhd has registered a net profit of RM5.6 million in the first quarter ended July 2017, compared with RM5.5 million in the same period a year ago mainly due to stronger sales in the domestic market.
It reported 41.7 per cent higher revenue to RM53.7 million in the quarter, from RM37.9 million a year ago.
Local sales increased 64 per cent year-on-year to RM35.5 million to make up two-thirds of group revenue; while exports climbed 11.8 per cent to RM18.1 million to comprise the balance one-third of revenue.
The slower growth pace in bottomline was due to higher operating expenses of labour, utilities and raw materials.
SCGM declared the first interim dividend of 1.5 sen per share in respect of financial year 2018, with
ex-date on September 26, 2017 and payment date on October 13, 2017.
The total dividend payout of RM2.9 million in respect of the financial year 2018 translates to 51.9 per cent of the group’s first quarter net profit.
Managing director Datuk Seri Lee Hock Chai said SCGM maintained an optimistic outlook, especially for the local market.
“We have witnessed eight consecutive quarters of double-digit growth in domestic sales of thermo-form packaging, not only because of higher demand from retailers following the ban on polystyrene packaging, but also because of its relative low-cost and space-saving in storage.
Lee said there is much more potential to tap into in the Klang Valley, as it seeks to add more distributors and retailers to its distribution network, and also develop new products to meet market requirements.
“Our upcoming new plant in Klang Valley, which is on track to commence by the end of this month, will be well-positioned to capture the demand from Central and even Northern Peninsular Malaysia,” he said.
SCGM’s 47,000 square feet factory in Telok Panglima Garang, Klang would be based in rented premises and produce thermoform lunchboxes.
Lee said the new factory is aimed at increasing production capacity, reducing delivery time to customers and lowering logistics costs.
The group has allocated RM20 million in capital expenditure for machinery. With five thermoform machines and two extruders, the Klang Valley factory would have a production capacity of 5 million kg per annum.
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.
With the addition of the factory in Klang Valley, production capacity will increase to 41 million kg per year by end-2017.