Box-Pak (Malaysia) Berhad : Growth From Vietnam - 09/03/2010

We met up with Box-Pak’s management and we gathered the following key takeaways from the meeting: ♦ Vietnam its future growth driver. Box-Pak will unlikely be expanding its Malaysia operations given its relatively mature carton market. Box-Pak’s Vietnam operations provided growth for the company in the past four years, growing by a CAGR (FY05-09) of 32.5% (vs. Malaysia of 5%). We understand that Box-Pak is one of Vietnam’s top 10 players in the carton industry. Given the strong prospects in the Vietnam market i.e. 3x Malaysia’s population size, high proportion of young adults (about 62%), increasing trade liberalisation and is currently in the early phase of industrialisation, we believe Box-Pak will be a key beneficiary. As it stands, Box-Pak will be expanding its Vietnam operations by increasing its capacity by 2,000t/m in mid-2010 (to 6,000t/m) and by another 2,000t/m (to 8,000t/m) in 2011.