Daibochi has agreed to acquire Malaysia-based flexible plastic packaging (FPP) firm Mega Printing & Packaging (MPP) for MYR125m ($30m).
Based in Melaka, MPP is involved in the manufacturing of downstream flexible packaging solutions, including roll-form and pre-made pouches with laminated structures.
The company’s solutions can be used in food and beverage (F&B) applications, including confectionary, snacks, noodles and powdered beverages.
MPP operates manufacturing facility in Kawasan Perindustrian Teluk Emas, which has a production capacity of 264 million meters of FPP.
MPP’s facility, along with Daibochi’s manufacturing facilities in Ayer Keroh and Jasin of Melaka, will have an increased production capacity by 33.3% from 792.53 million meters to 1,056.53 million meters per annum.
According to Daibochi, MPP achieved MYR7.8m ($1.8m) net profit on MYR128.8m ($31.1m) revenue in FY2017, and 86.5% of FY2017 revenue was derived from Malaysia-based customers, with the remaining from 13.5% from export markets, such as the Philippines, China, Mauritius and Kuwait.
Under the deal, Daibochi will purchase 4.5 million ordinary shares in MPP. Subject to the approval of the board of directors and shareholders of Daibochi, the deal is expected to be completed in the third quarter of this year.
Daibochi managing director Thomas Lim said: Getting on the acquisition trail places Daibochi on the higher growth trajectory, even as we strengthen our position as a super regional player in the FPP segment.
“This acquisition sees two leading FPP giants with strong track records joining forces, possessing cumulative experience of close to 70 years. The exercise not only combines our respective prowess in product portfolio and manufacturing capacities, but also extends our reach through the wider network of customers and suppliers.”
Established in 1972, Daibochi provides end-to-end flexible packaging solutions for the customers in the F&B and FMCG sectors.
The company’s scope of services includes prepress, in-house cylinder-making, extrusion/dry lamination, metalizing, and slitting/bagging.
Daibochi, which serves customers such as Nestle, Mondelez International and PepsiCo, also exports its products to the customers in South East Asia and Australia.