George Town: Thong Guan Industries Bhd will invest RM150mil to add six production lines, comprising three blown film and three stretch film lines, to its new 24-acre production site in Sg Petani.

       Group executive director Alvin Ang told StarBiz that these six lines would raise the group’s production capacity to 230,000 tonnes per annum from 180,000 tonnes in 2021.

       The lines from Germany are currently being installed from now till the fourth quarter.

       The group has invested over RM200mil to set up three production facilities at the new site.

       “The land was originally 16 acres, but we increased it to 24 recently with the acquisition of another eight.

       “The first plant produces stretch film material, while the other two produce courier bags and premium food packaging products,” he said.

       The group’s stretch films, courier bags and premium food packaging materials will drive this year’s growth.

       “Japan will continue to contribute about 20% this year to our revenue.

       “The other countries that have become important are the United States, Europe and Australia, which will contribute about 30% to the revenue,” he said.

       Ang said the group planned to invest in a manufacturing facility to produce stretch films in the United States next year.

       “We are now identifying a suitable site in the mid-West and working out the investment cost,” he said.

       The group recently received an invitation from its distribution partners in the United States to set up a stretch-film production facility.

       The group considers the United States a critical market, important enough for the group to have a physical presence there.

       This is because the country is one of the largest consumers of plastic packaging materials.

       “The global market consumes some four million tonnes of stretch film per annum, and the United States absorbs 1.2 million tonnes.

       “It is the second-largest market after Europe, which consumes two million tonnes,” Ang said.

       A Reportlinker report has forecast that the global stretch and shrink film market will reach US$20.8bil (RM90.55bil) by 2027 from US$14.5bil (RM63.13bil) in 2020, growing at a compound annual growth rate (CAGR) of 5.3% over the 2020-2027 period.

       The report said that China is forecast to reach a projected market size of US$4.5bil (RM19.59bil) by 2027, charting an 8.6% CAGR over the 2020-2027 period.

       Japan and Canada are projected to grow at a 2.9% and 4.2% CAGR, respectively, over a similar time frame. Within Europe, Germany is forecast to grow at 3.7% CAGR.