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Asia Poly on expansion drive

Asia Poly on expansion drive

14 Dec 2020

Cast acrylic sheet manufacturer Asia Poly Holdings Bhd will continue its expansion plans by buying land to set up additional production capacity to capture growing markets.

A source close to the company said Asia Poly which makes acrylic sheets for many industries including food, sanitary, automotive, energy, and medical globally, will buy some ten acres in Klang for this purpose which in turn will see an additional five lines of production.

Combined with its current three lines, the company, which is the only listed Malaysian manufacturer of cast acrylic sheets will produce over 60,000 tonnes of acrylic sheets, making it one of Asia’s largest companies doing such a business.

The plan is set to happen sometime next year, the source said, subject to some conditions.

Currently, one of Asia Poly’s main competitors is Indonesia’s PT Margacipta Wirasentosa (MC) which according to its website, “maintains the largest cell cast manufacturing facility in Asia by production capacity”. According to its website, the family-owned business has six production lines, giving Margacipta an annual production capacity of 30,000 tonnes.

Asia Poly meanwhile, controlled by local businessman Datuk Yeo Boon Leong will finance its land purchase by internal funds but may raise more if it is necessary, subject to shareholders’ approval. Notably, the group is in a net cash position of around Rm68mil currently.

The robust demand for its products is increasing, ironically due to the ongoing Covid-19 pandemic where its acrylic products such as screen dividers are used a protective barrier against the virus.

However, moving forward, its focus will be on the automotive and energy sectors which increasingly require their sheets for their end-products, according to the source.

Asia Poly which aims to make its biggest market the US, recently also signed a heads of agreement to acquire a 30% stake in GB Plas Sdn Bhd for Rm15mil.

In annoucing this development, Asia Poly said GB Plas is one of Malaysia’s biggest manufacturers and exporters of extruded acrylic and plastic sheets. With GB Plas, Asia Poly will have a holistic acrylic product spread, the source noted.

Asia Poly returned to the black recently, stating that it made a net profit of Rm4.09mil in the third quarter ended Sept 30, compared to a net loss of Rm2.13mil recorded in the same quarter last year due largely to increased demand for its products.

Commenting on the financial results, Yeo said in a statement then that the company is “confident that FY2020 will be a strong growth year for the group”. At last look, shares of Asia Poly were at 31 sen apiece, valuing the entire company at Rm244mil. At 31 sen, the stock is 48% off its 52-week high of 60 sen.

Source: The Star