SLP (7248) - SLP Resources sees strong first half on high resin prices
Monday, 19 May 2014
GEORGE TOWN: Plastic packaging manufacturer SLP Resources Bhd is projecting a strong first half 2014 over the previous year’s corresponding period, riding on factors that are pressuring resin prices to increase in the short and medium term.
Group managing director Kelvin Khaw told StarBiz that the group had so far secured some RM18mil worth of orders for its plastic packaging materials, which is about 12% higher than the same period last year.
He said most of the orders came from Japan, Australia and New Zealand.
“Customers are stocking up plastic packaging materials as the current supply of resin is limited.
“There is concern that the price of resin may move upwards in the short and medium term due to the limited supply situation,” Khaw said.
The selling price of crude oil currently hovers around US$100 per barrel, while the price of polyethylene resin is about US$1,730 per tonne compared with US$1,500 in June 2013.
“The price of polyethylene had remained at the US$1,700 level for the past three months, without showing signs of weakening,” Khaw said.
He said customers were also buying more from Malaysia because its competitors in China could no longer produce cheap plastic packaging materials with consistent quality.
“Due to high plastic resin and rising production cost, the price of plastic packaging materials from China, for example, are now almost on par with us.
“By the end of the second quarter, we expect another RM27mil worth of plastic packaging materials orders coming in, which will enable us to perform better than last year’s corresponding period,” Khaw said.
The domestic sales, contributing about 60% of revenue, is picking up now as the local food and beverage sector is buying plastic packaging materials in preparation for the forthcoming Hari Raya festive holidays, according to Khaw.
On its first quarter performance, Khaw said the group achieved its sales target of RM44.5mil and sold a total of 8,000 tonnes worth of packaging materials.
“Japan was the top export market. There were strong orders from Japan during the first three months of the year, as the Japanese government was getting ready to raise its consumption tax to 8% from 5% on April 1, which covered also imported consumer goods,” Khaw added.
For the first quarter ended March 31, 2014, SLP posted RM3.4mil in pre-tax profit on the back of a RM44.5mil revenue, compared with RM3.3mil and RM38mil respectively achieved in the same period a year ago.
Moving forward, Khaw said SLP was confident of producing some 32,000 tonnes of packaging materials this year, compared with 28,000 tonnes achieved in 2013.
A recent Nexant report says that the global polyolefins growth would be spurred primarily by the packaging, automotive, manufactruring, and constructions sectors.
The global demand for polyolefins is projected to grow at a compounded annual growth rate of 5% from 2013 to 2018.
“Over 55% of the global incremental polyolefins demand over the next five years is expected to be in Asia,” the report says.
http://www.thestar.com.my
Monday, 19 May 2014
GEORGE TOWN: Plastic packaging manufacturer SLP Resources Bhd is projecting a strong first half 2014 over the previous year’s corresponding period, riding on factors that are pressuring resin prices to increase in the short and medium term.
Group managing director Kelvin Khaw told StarBiz that the group had so far secured some RM18mil worth of orders for its plastic packaging materials, which is about 12% higher than the same period last year.
He said most of the orders came from Japan, Australia and New Zealand.
“Customers are stocking up plastic packaging materials as the current supply of resin is limited.
“There is concern that the price of resin may move upwards in the short and medium term due to the limited supply situation,” Khaw said.
The selling price of crude oil currently hovers around US$100 per barrel, while the price of polyethylene resin is about US$1,730 per tonne compared with US$1,500 in June 2013.
“The price of polyethylene had remained at the US$1,700 level for the past three months, without showing signs of weakening,” Khaw said.
He said customers were also buying more from Malaysia because its competitors in China could no longer produce cheap plastic packaging materials with consistent quality.
“Due to high plastic resin and rising production cost, the price of plastic packaging materials from China, for example, are now almost on par with us.
“By the end of the second quarter, we expect another RM27mil worth of plastic packaging materials orders coming in, which will enable us to perform better than last year’s corresponding period,” Khaw said.
The domestic sales, contributing about 60% of revenue, is picking up now as the local food and beverage sector is buying plastic packaging materials in preparation for the forthcoming Hari Raya festive holidays, according to Khaw.
On its first quarter performance, Khaw said the group achieved its sales target of RM44.5mil and sold a total of 8,000 tonnes worth of packaging materials.
“Japan was the top export market. There were strong orders from Japan during the first three months of the year, as the Japanese government was getting ready to raise its consumption tax to 8% from 5% on April 1, which covered also imported consumer goods,” Khaw added.
For the first quarter ended March 31, 2014, SLP posted RM3.4mil in pre-tax profit on the back of a RM44.5mil revenue, compared with RM3.3mil and RM38mil respectively achieved in the same period a year ago.
Moving forward, Khaw said SLP was confident of producing some 32,000 tonnes of packaging materials this year, compared with 28,000 tonnes achieved in 2013.
A recent Nexant report says that the global polyolefins growth would be spurred primarily by the packaging, automotive, manufactruring, and constructions sectors.
The global demand for polyolefins is projected to grow at a compounded annual growth rate of 5% from 2013 to 2018.
“Over 55% of the global incremental polyolefins demand over the next five years is expected to be in Asia,” the report says.
http://www.thestar.com.my
