KUALA LUMPUR: Packaging manufacturer and leading property developer Scientex Bhd is acquiring smaller rival Mondi Ipoh Sdn Bhd (MISB) for RM58 million cash to expand its consumer packaging division.

In a filing with Bursa Malaysia yesterday, Scientex said its wholly-owned unit Scientex Packaging Film Sdn Bhd had signed a share purchase agreement with Germany’s Mondi Consumer Packaging International GmbH to acquire 21.05 million shares or a 100% stake in MISB. The proposed buy will be funded via internal funds.

“The acquisition of MISB will allow the enlarged Scientex group to expand our clientele to include leading international brands in the food and beverage and fast-moving consumer goods sectors,” said Scientex managing director Lim Peng Jin in a statement.

“Additionally, approximately 70% of MISB’s revenue comprises exports to Asia-Pacific, thus giving us a larger market share in the regional packaging industry,” he added.

Scientex also stands to benefit from the increased production capacity of its downstream consumer packaging products, especially functional films.

MISB is mainly in the production of downstream specialty consumer packaging films and film-based components. It has two manufacturing plants in Perak with production capacity of 16,800 tonnes per year.

The buy will boost Scientex’s consumer packaging production capacity by 30% to 76,800 tonnes per year from 60,000 tonnes now.The proposed acquisition is estimated to be completed by Aug 11.

This article first appeared in digitaledge Daily, on August 6, 2015.