KUALA LUMPUR (May 26): Flexible packaging manufacturer Daibochi Plastic and Packaging Industry Bhd expects both its local and export sales to grow in the current financial year ending Dec 31, 2016 (FY2016), underpinned by sustainable demand for F&B and FMCG sectors.

In a statement today, its managing director Thomas Lim said that on the overseas front, the company had begun delivering newly-secured orders to customers in Australia and New Zealand (ANZ) from the second quarter onwards.

He said that at the same time, the domestic space was poised for a rebound, as indicated by the order trend from Daibochi’s Malaysia-based multinational and homegrown customers.

“Domestic sales in 1Q16 increased by about 12% quarter-on-quarter, which is the first double-digit expansion since the Goods and Services Tax came into effect last year.

“The returning consumer sentiment is a positive signal for our customers, and subsequently for converters like Daibochi going forward.

“Meanwhile, we remain vigilant on challenges in human resource as well as increasing operating costs, and strive to mitigate them through improving our operational efficiency,” he said.

Lim also said that Daibochi has plans to bring in new machinery to further enhance its production capacity in addition to its manufacturing facilities in its Ayer Keroh and Jasin plants were approximately 60% utilised at present.

He said Daibochi would in the third quarter of 2016, take delivery of a new blown film machine that would increase its overall capacity, and also produce wider-width film due to its advanced technology.

“Currently, we only produce half of our blown film requirements in-house, while purchasing the rest. The expanded quantity and quality of blown-film with the new machinery would enable us to derive greater economies of scale from the larger capacity, as well as enjoy cost-savings in the longer term. This would enable us to catalyse future growth and improve productivity,” he said.

Lim said Daibochi is investing RM20 million in capital expenditure (CAPEX) in FY2016.

“Of this, RM13 million is allocated for Phase 2 expansion of Daibochi Plastic 2 in Jasin, comprising new machinery and production floor expansion.

“The balance RM7 million would be for recurring CAPEX in Daibochi Plastic 1 in Ayer Keroh,” he said.