By any yardstick, a half century is a long time. To give this some perspective, it took 50 years for man to reach the summit from the time the first photographs set Mount Everest apart as the ultimate challenge. Likewise, it took almost 50 years for cancer research to yield such progress in prevention and treatment from the time US President Richard Nixon signed the National Cancer Act as a challenge to find a cure.
These are challenges requiring courage and commitment, values that Scientex has embraced as its own. Similarly, the Scientex story is about taking up challenges and for this reason, the theme of our 50th Anniversary is ‘Challenge New Heights Together’.
Our story may have begun 50 years ago, but it is only just taking off. After our incorporation in 1968, we made steady progress during the first 40 years. However, our efforts then were fragmented and disconnected. We lacked structure and our operations were not consolidated or streamlined. In the immediate years before 2008, Scientex operated 10 business units with 10 different sets of people, all working in silos independent of each other. To use a tug-of-war analogy, we were pulling on our own, but not pulling together.
The last 10 years were a different story. In 2008, we merged our listed entities, bringing two companies together as one. The same year, Scientex celebrated its 40th Anniversary, giving the Board, management and staff a common goal for all to cooperate and collaborate. Looking back, this was a seminal moment. We discovered we could achieve much more in lesser time by working single-mindedly to navigate in one direction. As a result, we formed an executive committee or Exco in 2009 to coalesce our focus and drive the company towards a collective vision and aspiration.
It was during these last 10 years that Scientex came into its own. In that period, we leveraged on our strengths to build capacity. At the same time, we developed our resources in capital, talent and technology that enabled us to undertake more ambitious projects to grow faster and go further. Following this exceptional decade of exponential growth and extraordinary achievements, Scientex is today a RM2.6 billion company with thousands of employees and operations spread throughout Malaysia and beyond.
Based on how far we have come, the tendency is to sit back and enjoy the fruits of our labour. Yet, it is not in our nature to rest on our laurels and let complacency creep in. Instead, we are ready to take on the next challenge, just as mountain climbers continue to attempt summiting Mount Everest and cancer researchers remain resolved in finding new pathways towards cures for different cancers.
In the next 10 years, we intend to push the boundaries and propel ourselves like never before. We have a new Vision 2028 to become a RM10 billion company with a production output of 1 million metric tonnes of flexible plastic packaging (FPP) and completion of 50,000 affordable homes.
This is an ambitious goal, one which is fraught with challenges, internal as well as external. In response, Scientex will remain nimble and responsive to the ever-changing market forces, avoiding the common trap of excessive bureaucracy which commonly afflicts companies as they grow in size. Our corporate philosophy of ‘management like water’ will continue to set us apart through lean management and our agility to navigate the volatile, uncertain, complex and ambiguous world ahead to seize opportunities wherever and whenever they appear.
Given this agility, we will intensify our investment to build capability and capacity. While we had RM620 million in assets and RM350 million in equity 10 years ago, we now have more than 5 times that amount with RM3.4 billion in assets and RM1.8 billion in equity, giving us the financial muscle for investment in new plants for manufacturing and acquisition of new land banks for property development whenever the need arises.
For our manufacturing division, we intend to drive annual capacity up from 450,000 metric tonnes to 1 million metric tonnes over the next 10 years. To reach this goal, we need to grow our market share by: capturing a slice of the rapid growth in demand for our existing products; securing new regional markets for our present offerings; and creating new solutions to penetrate different market segments. As we explore new frontiers to become a truly global player, our challenge is to learn and adapt to different market demands and conditions.
For our stretch film business segment, we will continue to tap our economies of scale to grow our volume-based model as we seek to venture into new markets. For this reason, we have invested in a new plant in the United States to expand our stretch film markets beyond Asia Pacific to the huge markets of the Americas.
In the case of our custom film segment, we first ventured into flexible plastic packaging for consumer-based products in 2013 following our acquisition of Great Wall companies. This opened the door to new opportunities for Scientex as our quality packaging products play an important role in enhancing packaging integrity to reduce food wastage and spoilage through better quality packaged products. We are now poised to tap into the fast-growing FPP market, which is expected to grow in excess of USD200 billion by 2020. The food and beverage (F&B) segment, which constitutes 70% of this market, will be a key focus for Scientex. By capitalising on our competencies, we will develop customised solutions for these specialised market needs in collaboration with our customers while also keeping pace with emerging trends such as e-commerce, convenience and sustainability. Our latest improvements through the adoption of digital printing technology in our production process are part of the continuous efforts to complement and supplement Scientex’s capabilities to meet changing customer requirements. Our specialty segment leverages on our joint ventures with international partners to produce specialty products such as adhesives and solar films. Through the transfer of skills and technology, we now have the competencies to move into high technology products that can respond to global market trends.
On the property front, Scientex has long been entrenched in the southern part of Peninsular Malaysia, providing affordable housing to the masses for the past 20 years. In line with our corporate philosophy, we continue to search for new ways to deliver affordable housing by tapping into our expertise and efficiencies in order to derive greater cost savings which are then passed on to our buyers. A decade ago, we were building at a rate of 500 units per annum. Today, Scientex is building 5 times the number of units at 2,500 per year. All in, we have delivered nearly 17,300 units of quality affordable homes, with high occupancy rates recorded for all our Johor and Melaka projects. To achieve our next 10-year aspiration, we need to look beyond our existing markets by crossing boundaries and extending our trademark of developing affordable housing in previously uncharted territories. Since last year, we have expanded from our traditional bases in Johor and Melaka northwards to Selangor and Perak as we strive to deliver 50,000 affordable homes by 2028.
As with both the manufacturing and property development divisions, going where we have never been before comes with a host of challenges. Here again, our people would need to push the envelope as they contend with new rules and regulations, different market sentiments as well as intense competition from established players with home ground advantage.
Central to these ambitions and aspirations is our embrace of sustainability as a catalyst to develop a company of the future and for the future. For many years, Scientex has been committed to driving sustainability across the economic, environment and social spheres.
Economically, Scientex’s robust business performance in recent years has significantly contributed to the financial growth and greatly improved the livelihoods of our stakeholders, from our shareholders, partners and associates to our employees and vendors. To reduce the impact of our operations on the environment, we have diligently adhered to the 3Rs programme of Reduce, Reuse, Recycle in every aspect of our manufacturing and property development activities. In addition, our quality packaging solutions have gone a long way to reduce food wastage for our customers by extending the shelf life of packaged food products. In property development, Scientex’s commitment to providing affordable housing has helped to put a roof over the heads of tens of thousands of Malaysians.
At Scientex, we are firm in our belief that sustainability drives growth, by generating opportunities and optimising resources in capital, assets and people while also harmonising our activities with the communities and environment within our considerable sphere of influence. To us, sustainability is a business imperative with the potential to ensure we can meet all our aspirations and achieve all our goals on a continuous and consistent basis.
What I have outlined represents our concerted approach to our ambitious target. Some may say this is a bridge too far for Scientex. Yet, we can be successful, if only we are courageous and fully committed to take up the challenge.
Mankind is at its best when we come out of our comfort zone to test ourselves and push our limits. In this regard, this is what we will and must do at Scientex. It is together that we can challenge for new heights.
