“We expect the Seacera deal to be completed in two to three months, and this would complete our range of consumer packaging that we currently offer to customers,” Lim said.
PETALING JAYA: Scientex Bhd has allocated about RM120mil as capital expenditure to expand its operations and has 14 property projects planned for 2014, said managing director Lim Peng Jin.
He said the company was also hoping to finalise its Seacera deal soon. In November, Scientex proposed to buy biaxially oriented polypropylene (BOPP) films maker Seacera Polyfilms Sdn Bhd for RM40mil.
It also wanted to focus on capacity expansion of the business units it recently bought from GW Plastics Holdings Bhd for RM283.2mil.
The company has allocated RM50mil to increase and expand the GW Plastics units that were using inefficient machines.
“We expect the Seacera deal to be completed in two to three months, and this would complete our range of consumer packaging that we currently offer to customers,” he said after Scientex AGM and EGM.
With the expansion, he said the company would have 16 manufacturing lines capable of producing 194,000 tonnes of stretch films per annum from 154,000 tonnes currently.
This would make Scientex the third-largest stretch film producer globally, added Lim.
Scientex has also allocated RM30mil for two parcels of freehold land in Kulai, Johor, that it planned to buy from Pine Plantation Sdn Bhd for its property development division.
The expansion plans have brought the company’s gearing ratio up to 0.38 times, which, according to Lim, is still comfortable.
“We are quite careful with our balance sheet management; 0.2 to 0.5 times is still a reasonable level. We don’t want to have a high gearing situation unless we have a very attractive opportunity to expand,” he said.
He said the company wanted to improve its liquidity, which on average saw a daily trading volume of just 263,000 shares year-to-date. It closed flat at RM5.61 with 95,200 shares traded yesterday.
“We don’t have any proposal at the moment but yes, we want to improve the liquidity of our stock.
“I’m not sure if a share split would improve the liquidity but we are improving our investor relations. We also have a dividend policy of distributing at least 30% of our net profit,” he said.
On its property development business, Lim said Scientex had projects worth about RM7bil in gross development value (GDV) which would last for about 10 years.
He said the company had launched seven projects for this financial year and still had another seven projects in the pipeline that would be launched anytime, depending on market sentiments.
“We have realised about RM2bil (in sales) and still have another RM5bil. With the recent cooling measures, the company is focusing on affordable housing projects with prices ranging from RM200,000 to RM500,000,” he said.
He said Scientex still had 400ha landbank to be developed.