Melbourne, Australia — Secos Group Ltd. has leased a facility in Malaysia to start manufacturing bioplastic resin.
The company already has a cast film manufacturing facility in Malaysia.
Secos told the Australian Stock Exchange it had raised A$2.7 million (US$2 million) through a share placement, most of which will be used to fund the new Malaysian facility.
Secos said it has commissioned two compounding lines for the new facility to "help address the existing backlog of customer orders, with resin manufacture and delivery expected by June."
When the new plant is running at full production capacity it will produce 12,000 metric tons a year, which Secos estimates will increase its annual sales by A$40 million (US$30.7 million).
Secos has entered into a two-year lease with an option for another two years at a new 30,000-square-foot facility 12 miles from Port Klang, Malaysia's largest port. Secos-owned Stellar Films (Malaysia) Sdn Bhd operates a cast film manufacturing plant at Port Klang.
Secos Managing Director Stephen Walters said the Malaysian plant will manufacture the company's core product line and supports the company's international growth strategy while leveraging green initiatives set by the Malaysian government.
He said the new production facility opens the potential for innovative new products and guarantees continuity of supply. The facility has sufficient space for significant further expansion to meet ongoing growth in Asian demand for bioplastic resin.
Secos told the ASX demand for compostable resin "is at an all-time high throughout the world, as major corporate brands pursue the benefits of customer acceptance and the boost to loyalty associated with environmental packaging."
Melbourne-based, publicly listed Secos Group Ltd. was formed though the April 2015 merger of Melbourne-based Cardia Bioplastics Ltd. with Melbourne-based privately held Stellar Films Group Pty. Ltd.