KUALA LUMPUR (Sept 12): Thermal vacuum forming plastic packaging manufacturer SCGM Bhd is set to enter a new segment by making plastic cups by end-2014.

In a statement Friday, the company said it had allocated RM11.6 million in capital expenditure (capex) for machinery acquisition and construction of a new plant for the venture located at its Johor Bahru plant.

SCGM said plastic cups are complementary to the group’s current product range of disposable plastic trays, mainly for the food, electronics, and medical sectors.

Chairman and Managing Director Datuk Seri Lee Hock Seng said entering the new market of plastic cups not only expanded the company’s product range, but also leveraged on its existing relationship with customers in the food and beverage industry.

“With our track record for quality and delivery, we have secured orders for more than half of our plastic cup production capacity to date,” said Lee.

Lee said, going forward, the company also intends to export to Japan and China,among others.

“We are optimistic that our new venture will contribute positively to the current financial year onwards,” he said.

Lee said SCGM’s new plastic cup production line has the capacity to manufacture 700 cups per minute, equivalent to 1 million cups daily.

He said the RM11.6 million capex would be financed by internally generated funds and borrowings.