CYL Corp Bhd which is one of the country’s leading plastic packaging manufacturers, is in expansion mode to boost its production.
CYL Corp managing director Chen Yat Lee said the firm is allocating RM8 million this year in capital expenditure (capex) to buy machineries and equipment.
CYL expects its financial performance will continue to progress this year and in the next few years, he added.
Last year, it was reported that the company had spent RM3.6 million on the acquisition of new equipment.
“The RM8 million is backed by our strong cash reserve and low gearing. The plan is in line with our efforts in shifting the focus towards automation,” Chen said after the company’s annual general meeting yesterday.
CYL has been registering healthy and positive cash balances from year to year with an increase of almost 50 per cent in 2015 from 2014, according to its latest annual report.
Chen said that the company’s existing equipment are old and it is always looking to acquire more advanced machineries for better productivity.
On whether CYL will invest in a new plant, he said the facilities are sustainable for the next more than five years.
As part of its growth plan, CYL is in the midst of broadening its reach in the packaging sector.
“We are aiming to grow our share in the industry, despite the fluctuation of the ringgit,” said Chen.
CYL’s clients comprise mainly multinational companies followed by small and medium enterprises within the food, automotive, and pharmaceutical industries.
In its latest annual report, CYL said revenue and net profit had grown 16.1 per cent and 2.6 per cent respectively.
It also paid a dividend of 5 sen for the financial year 2015, making it the highest dividend payment for the past five years.