Malaysia's Scientex Bhd plans to buy two flexible packaging plants from Mondi Group for 58 million Malaysian ringgit ($15 million), in a bid to expand its consumer packaging business in Asia.
The acquisition of the Mondi Ipoh Sdn Bhd business and its two Malaysian factories would expand Scientex's capacity in those markets by 30 percent and boost its presence in food and beverage and fast-moving consumer goods packaging.
“We stand to benefit from the increased production capacity of the Group's downstream consumer packaging products, particularly functional films,” said Lim Peng Jin, Scientex managing director, in an Aug. 5 statement. “This allows us to serve a broader set of requirements from new and existing clientele, especially large multinationals with diverse packaging needs.”
The acquisition, which is expected to be completed by Aug. 11, would increase Scientex's production of consumer packaging film by about 37 million pounds per year, to 170 million pounds.
The deal includes Mondi's two packaging plants in Sungai Siput and Chemor in the city of Ipoh, about 125 miles north of Kuala Lumpur.
Scientex said that 70 percent of MISB's sales are exported within the Asia Pacific region. The MISB unit had 2014 sales of 141.9 million ringgits ($36.7 million) and normalized EBITDA of 13.1 million ringgits ($3.4 million).
“The regional consumer packaging markets, comprising not only the lucrative but also resilient F&B and FMCG industries, offers us much opportunity for growth,” Lim said.
Scientex, which is based in Shah Alam, Malaysia, said it's also the largest stretch film producer in Asia and among the top three globally with a production capacity of 330 million pounds annually.
It announced in September it was spending more than $90 million over three years to expand capacity in polyethylene and biaxially oriented polypropylene film and get into the cast PP film business.
Mondi's consumer packaging business, which includes MISB, has been selling off other film manufacturing plants lately.
Last month, it sold a polyethylene laminating film and household cling film plant in Osterburken, Germany, to Polifilm Extrusion GmbH. Mondi said it wanted to “move away from supplying films to competitors” of its consumer packaging business.
Mondi Group employs 25,000 in 30 countries, manufacturing packaging and paper. It is traded on the Johannesburg and London stock exchanges.
