MALAYSIA: BP Plastics eyes double-digit sales growth with new machine

Johor-based polyethylene film-maker, BP Plastics Holdings Bhd, which expanded its plastic operations with a new 3m cast stretch film machine last year, is looking at double-digit sales growth this year.

Group managing director Lim Chun Yow said with the machine running at almost full capacity now, the company was confident of achieving higher export sales this year. The company is targeting to increase its export sales to 80% of total turnover this year from the 79% achieved previously. “Despite the tepid growth seen in the overall markets and the recent strengthening of the ringgit, our continuous pursuit in producing better product mixes for new markets and existing customers would spur export sales,” he said.

With a market value of RM300.2 million, 63% of the company’s sales are in US dollar, 20% in ringgit followed by 10% in Singapore dollar and the remaining 7% in euro and yen. The domestic market made up about 20% of the company’s total annual turnover currently.

On whether it had plans to diversify, Lim said for now it would focus on growing its business organically. “Other than the existing markets, BPP is targeting exports markets such as Japan, Asean, Far Eastern countries and Australia. … But we are always open to the possibility of business expansion in future,” said Lim, declining to elaborate this further.

Listed on the Main Board of Bursa Malaysia Securities Bhd in 2005, the net cash company that has no borrowings would also focus on improving cost efficiency and productivity in light of the rising operating costs environment. Meanwhile, Lim, who was one of the founders of BP Plastics, said raw material prices was mainly driven by supply and demand conditions. “The current scheduled and unscheduled shutdowns of petrochemical plants worldwide, particularly in Asia have caused severe supply shortage this year, resulting in higher raw material prices of ethylene and polyethylene since January. … Such conditions are predicted to prevail in the short-term, which could further elevate the raw material prices,” he noted.

But, with additional production capacities coming on-stream from petrochemical plants in the Middle-East and North America regions in the second half of this year, prices would perhaps stabilize, according to Lim.

Source: Daily “The Star”, Kuala Lumpur; 4 Apr 2016
(Syed Rashid Ali, Karachi, Pakistan)