Malaysia's BP Plastics Holding Bhd. is investing $3.2 million in an expansion of its stretch-film capacity to boost exports, particularly in higher growth regions in Asia.
The Johor-based firm told Malaysia's Star Media Group that it invested 13.5 million Malaysian ringgits in the new 3 meter line from Austria, which started operating in June. The line is aimed to boost exports to 80 percent of sales, up from 78 percent last year.
The publicly traded company says it's one of Asia's largest makers of polyethylene film, with annual capacity of more than 54,000 metric tons (119 million pounds). It also makes plastic bags.
BP Plastics Managing Director Lim Chun Yow said the company has benefitted from lower resin prices but said the overall business climate is uncertain.
“Demand from countries like Japan, South Korea and China has slowed down,” Lim said, adding the domestic Malaysia demand is also somewhat softer because of the weakening ringgit and implementation of new taxes.
Still, the company said it achieved its highest sales last year since 2005, with sales up 17 percent to 283.9 million ringgit ($81 million).
It said it was “cautiously optimistic” that continued urbanization in Asia, along with lower oil and commodity costs, will lead to growth in demand for packaging materials in the region, particularly among countries that are heavy oil importers.