TGUAN (7034) THONG GUAN INDUSTRIES BHD Industries expects its revenue to grow

TGUAN (7034) THONG GUAN INDUSTRIES BHD Industries expects its revenue to grow

GEORGE TOWN: Thong Guan Industries Bhd expects its revenue to grow over 20% this year, driven by the rise in the demand for stretch films, courier bags, and food packaging materials.

Group managing director Datuk Ang Poon Chuan told StarBiz that the group had already posted a RM590mil revenue for the half-year of the 2021 financial year.

“Based on customers’ orders and forecast, we can say that the group’s 2021 revenue is ready to grow over 20%.

“Our plastic packaging materials capacity in 2021 will hit about 180,000 tonnes from 150,000 tonnes in 2020,” he said.

Ang said the group’s premium packaging products of stretch films, courier bags, and food packaging contributed to this year’s growth.

Group managing director Datuk Ang Poon Chuan told StarBiz that the group had already posted a RM590mil revenue for the half-year of the 2021 financial year.Group managing director Datuk Ang Poon Chuan told StarBiz that the group had already posted a RM590mil revenue for the half-year of the 2021 financial year.

“Japanese customers increased their orders after the Olympics as they were worried about a possible disruption in China’s supply chain, triggered by the shortage of containers and vessels and energy crisis.

“Most pre-orders were from us, as they fear that supplies from China may not reach them,” he said.

Ang said the group also expects the contribution from Europe, the United States and Australia will hit 30% this year.

According to Ang, the group allocated over RM200mil to establish three plants in Sungai Petani in early 2021 to produce premium plastic packaging products.

“The stretch film plant has been completed, and it is now in operation.

“The courier bag plant will be completed in next month. The third plant will operate in March 2022,” he said.

In 2022, the group will allocate RM50mil for two more stretch film plants.

On its expansion project into Myanmar, Ang said the group was delaying the project.

“The continuous depreciation of the country’s currency has made the business climate in the country unfavourable for doing business,” he said.

Ang said the group would invest RM300mil over the next six years to achieve its RM2bil revenue and pre-tax profit of RM200mil goals by 2027.

“Over the next six years, we expect to see the group achieving a 10% to 15% compounded annual growth rate (CAGR),” he said.

A Reportlinker report has forecast that the global market stretch and shrink film market will reach US$20.8bil (RM85.8bil) by 2027 from US$14.5bil (RM59.8bil) in 2020, growing at a CAGR of 5.3% over the 2020 to 2027 period.

The report said China is forecast to reach a projected market size of US$4.5bil (RM18.5bil) 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 approximately 3.7% CAGR.

https://www.thestar.com.my/business/business-news/2021/11/15/thong-guan-industries-expects-its-revenue-to-grow