KUALA LUMPUR: Bright Packaging Industry Bhd, which attracted some attention when it was embroiled in a boardroom tussle in 2013, is eyeing to double its revenue for the current financial year ending Aug 31, 2015 (FY15), driven by a bigger market share and its venture into the Russian market.

Based on its revenue for FY14 of RM34.15 million, Bright Packaging (fundamental: 1.3; valuation: 0.9) sees a potential rise in its revenue to generate a record RM68 million in FY15, surpassing its previous high of RM65.46 million in 1997.

The aluminium packaging supplier’s chairman Datuk Seri Syed Ali Abbas Alhabshee said the improved top line figure will also translate into better net profit growth for the year.

The rosy forecast is despite the fact that Bright Packaging reported a 76% drop in net profit to RM1.65 million in FY14, from RM6.91 million the previous year, while revenue fell 35% to RM34.15 million from RM52.22 million.

“We continue to increase our market share and seek clients from other tobacco customers such as British American Tobacco and Japan Tobacco International,” he told The Edge Financial Daily.

Currently, Bright Packaging derives most of its revenue from its customers in Asia-Pacific and Philip Morris and its affiliates.

On Jan 16, 2015, the company secured a contract worth US$15 million (RM55 million) with ZAO Philip Morris Izhora, a Russia-based affiliate of Philip Morris. The Russian tobacco manufacturer currently operates Philip Morris’ second-largest production facility in the world.

The contract marks Bright Packaging’s first foray into the Russian market, in which it sees great potential. It was also the single largest contract signed by the company.

“This is a fairly significant contract and represents a vote of confidence in the quality of Bright Packaging’s products and Philip Morris’ commitment to our service,” said Syed Ali.

The contract entails the supply of aluminium foil to ZAO Philip Morris Izhora for a period of two years until Dec 31, 2016.

Following the contract with the Russian tobacco manufacturer, the company aims to further expand its footprint in the Russian market.

“Russia represents one of the largest markets globally for us and we hope to make further inroads into the market. We will also explore other local Russian tobacco manufacturers once we have a better foothold following the orders from ZAO Philip Morris Izhora,” said Syed Ali.

According to its FY14 annual report, Bright Packaging’s export sales make up a major part of its revenue, accounting for 97% of its revenue. Its top markets include the Philippines, which accounts for 35% of its revenue, followed by Indonesia (31%) and Australia (12%).

Due to its significant exposure to the export market, Bright Packaging expects the strengthening of the US dollar against the ringgit to increase its profitability in the mid  to long term.

However, in the short term, the company said the impact will be neutral, as it is also importing equipment to upgrade and replace its current ageing equipment for the installation of new production lines.

To recap, Bright Packaging was embroiled in a high-profile boardroom tussle in 2013, which concluded with the removal of four of its six directors at the time, by a requisition party led by Syed Ali, in an effort to restructure the company.

Syed Ali, Ang Lay Chieng, Tee Wee Keat and Lye Jun Fei were elected to the board by a majority vote of 59.93%, replacing then-executive directors Wong See Yaw, Wong Siew Yoong, Yeap Cheng Chuan and Yap Kok Eng.

For the first quarter ended Nov 30, 2014 (1QFY15), the company’s net profit declined 21% to RM2.14 million from RM2.71 million in 1QFY14, while revenue climbed 29% to RM11.09 million from RM8.59 million.

Asked if the company will be considering any mergers or acquisitions going forward, Syed Ali said Bright Packaging did not rule out any opportunities.

“We have an optimum capital structure at the moment. Should an opportunity present itself, we would prefer to acquire using cash as we rarely find quality businesses on par with Bright Packaging,” he said, adding that the company aims to maintain its low debt level.

Year-to-date, Bright Packaging’s share price has appreciated 3.3%, outperforming the FBM KLCI’s gain of 2.96%.

The counter closed 1.05% lower at 47 sen last Friday, translating into a market capitalisation of RM74.18 million.

This article first appeared in The Edge Financial Daily, on March 30, 2015.