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Tek Seng plans RM20mil investment to produce plastic films

Tek Seng plans RM20mil investment to produce plastic films



Tek Seng plans RM20mil investment to produce plastic films




Tek Seng Holdings Bhd

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Tek Seng Holdings Bhd plans to invest around RM15mil to RM20mil to produce plastic film packaging materials for the industrial sector.

Group managing director Loh Kok Beng told StarBiz that the group plans to start the new production line in the second half of 2018.

“We are targeting the local and international markets, where our existing customers are based,” he said.

According to a Smithers Rapra report, the global demand for plastic films will grow at 4% per annum from 2016 onwards reaching 73.3 million tonnes in 2021.

A Markets and Markets report estimates the market size of industrial packaging to grow to US$93.28bil by 2026 from US$54.94bil in 2016, at a compounded annual growth rate of 5.4%.

“As the middle income population grows, there is also corresponding growth in the demand for lightweight plastic films that offer greater convenience and portability.

“Asia is the largest growth region for plastic films because of the number of manufacturers in the area, followed by North America and Western Europe.
“China is the largest national market for plastic films in the world,” Loh added.

On its polyvinyl-chloride (PVC) sheet business, Loh said the group expected to ship out about RM102mil worth of PVC sheets in the first half of 2018, compared to about RM98mil achieved for the same period in 2017.

“We have received enquiries, forecast, and purchasing orders from our customers to indicate that the first half of 2018 over last year’s same period will register at least 5% growth,” he added.

Currently, the PVC division generates about 62% of the group’s revenue.
“About half of the PVC output goes to the domestic market, while the remainder to the overseas markets in Africa, Middle-East, and South-East Asia,” he said.
On its solar cell business, Loh said the group had lowered the targets for 2018.

“Originally for 2018, the target was to manufacture 50 million pieces of solar cells or some 200MW of solar power.

“But due to the import tariffs imposed by US on solar panels, sales of of our solar cells have slowed down.

“Thus our target needs to be revised,” he said.

The US is a large market for the group’s solar cells, according to Loh.
Europe and South-East Asia are the other markets for the group’s solar cells.
“The future of the solar power industry, however, looks bright,” he added.

According to GTM Research, a leading global research firm specialising in the electricity industry, this 2018 will see the first-ever triple-digit year for the global solar market, with an anticipated 106 gigawatts of photovoltaics (PV) coming online.

“China, the US, India and Japan will continue to dominate in 2018, but their market share will decline from 82% in 2017 to 72% in 2018.

“The US tariffs will result in an 11% decrease in US solar PV installations over the next five years,” the report says