The purchase will be done through funds generated internally and borrows from a bank. Scientex&39s sole subsidiary scientex packaging film sdn bhd spf will purchase the malaysian gw packaging sdn bhd and great wall plastic industries berhad it is planned to be completed in the first quarter of 2013. Scientex stated that it will expand the volume of the industrial cast film production of the company from 120,000 tonnes a year to 154,000 tonnes a year. In a news release, the company mentioned that scientex will be permitted to enter into the word market of food and beverage f&b through this expansion with gwp&39s raged film, current printing and lamination facilities. The managing director of scientex, lim peng jin, stated that both companies will continue to have the planned directions without any change. He added that the sales will shoot up to about rm 1 billion, which is usd 327.3 million, from the expansion, making them stand among the world&rsquos largest plastic packaging manufacturers and exporters.
Moreover, it will increase earnings, while letting the expansion benefit through cost savings from scaling administrative efficiencies and operations, while obtaining raw materials. In pulau indah, selangor, a cast stretch film facility of scientex is located, with nine production lines at present. The plant is in the process of expansion and the annual production of lines will increase in capacity with 150,000 tonnes in the second half of 2013. Moreover, the future expansion has an adjacent land attained. Gw packaging includes cast stretch film packaging products&rsquo manufacturing and marketing.
Nevertheless, blown film packaging products are contrived and sold by great wall plastic industries for agricultural, food and beverage, electrical and electronics e&e, industrial, pharmaceutical and toiletries segments. The existing annual production volume of gw is 34,000 tonnes of cast stretch film and 28,000 tonnes of blown film. Rawang, selangor is the base for the facilities, where the company has enough space to expand with 28 acres of industrial land. The cast stretch film production volume is in the process of expansion to 10,000 tonnes, while the blown film operations are including other converting lines.
A collective revenue of rm 881 million usd 288 million was noted by scientex in its financial year that ended on july 31, 2012. Its manufacturing business contributed rm 36.5 million usd 11.95 million to this revenue. On the other hand, a collective revenue of approximately rm 344.1 million usd 112.6 million was documented by gw plastics in its financial year that ended on december 31, 2011. Scientex proposed that the enlarged entity for scientex and gw plastics, and the procurement completion basis, the joint group is expected to note an increase of over rm 1 billion usd 327.3 million in plastic packaging sales in the future. The deal is a "winwin" scenario for gw plastics and scientex, according to jin. He added that shareholder value is produced for shareholders of gw plastics in probable capital appreciation, and highlights the strategic expansion of scientex into the current chain value. Now, they have the capability of leaping high into lucrative and resilient f&b market with this earning and have a possibility of hitting the tough regional presence of gw plastics in this sector.
