Scientex Packaging Film, a subsidiary of packaging manufacturer and property developer Scientex Berhad, has agreed to acquire Klang Hock Plastic Industries (KHPI) for RM190m ($48.5m).
The acquisition will allow Scientex to expand its presence in flexible plastic packaging (FPP) market.
Established in 1976, KHPI produces custom films such as shrink films, polyethylene (PE) films, tubes and bags, lamination films, stretch films, stretch hoods, agriculture films, and flexitank films.
With a customer base of over 450 multinational corporations, the company provides its product solutions to the customers in food and beverage (F&B), as well as fast moving consumer goods (FMCG) sectors.
KHPI exports around 40% of its films to the customers in Asia-Pacific, Australia, Europe, Mauritius, Middle-East, New Zealand and the US.
With an annual capacity of 99,000 metric tonnes (MT), KHPI has two advanced manufacturing facilities in Klang of Selangor, Malaysia.
The acquired facilities will help Scientex's to enhance its total annual output capacity by around 30% to 455,000MT from the current 356,000MT.
Subject to approvals from shareholders of Scientex, the deal is expected to complete in the quarter of 2018.
Scientex Berhad managing director Lim Peng Jin said: “With the acquisition of KHPI, our manufacturing segment will see a leapfrog in revenue to exceed RM2.0 billion per year.
“This will not only strengthen our position in the global FPP market, but also immediately expand our capacity, product portfolio, and clientele reach.
“With the new production facilities, we aim to enhance our services and provide prompt and timely delivery to our global customers through our enlarged operations in multiple locations.”
Founded in 1968 as a PVC cloth and leather manufacturer, Scientex currently produces flexible plastic packaging products and custom film solutions.
The company has manufacturing facilities in Malaysia, Vietnam, and the US, in addition to sales and marketing locations in Japan, Indonesia, and Singapore.
Image: Scientex to acquire Klang Hock Plastic Industries. Photo: courtesy of adamr / FreeDigitalPhotos.net.