Secos Sells Share of Malaysian Plant

Secos Group Ltd. Secos Group Ltd.'s pet products, which include everything from bowls and toys to compostable waste bags, will launch in the U.S. soon.

Melbourne, Australia — Film and bioplastic manufacturer Secos Group Ltd. has completed the divestment of its half share in a Malaysia film coating business and is about to start marketing its bioplastic pet products in the United States.

Melbourne-based, publicly listed Secos formed though the April 2015 merger of Melbourne-based Cardia Bioplastics Ltd. with Melbourne-based privately held Stellar Films Group Pty. Ltd.

The merger included Stellar's 50.8 percent interest in Akronn Industries Sdn Bhd, which manufactures silicone-coated paper and film products in Nilai, Malaysia.

Secos sold its Akronn share to Itasa Servicios Generales SL, a Spanish release liner manufacturer.

Secos Group Managing Director Steve Walters said the sale price is confidential.

Secos, an acronym for "sustainable eco solutions," also operates resin, film and bag production facilities in Nanjing, China; Stellar Films (Malaysia) Sdn Bhd, which operates a film manufacturing plant at Port Klang, near Kuala Lumpur; and and a film and bioplastic production plant in the Melbourne suburb of Deer Park.

Walters said Secos will launch its pet product range in the United States via a new website within six months. The range includes food bowls and throwing sticks manufactured from Cardia Biohybrid, a mix of renewable thermoplastics, mainly corn starch, and traditional resins, which can include polyethylene or polypropylene. Cardia produces eight resins for varied applications.

The range also includes pet training pads, made with Stellar films, which Walters said are very popular in Japan, and dog waste bags made from compostable plastics. A social media campaign will support the website launch.

"The U.S. will be a mass test market," he told Plastics News. "Based on its success, we'll roll it out across the world."

Walters said the group's remaining Malaysian plant is now achieving consistent profitability but running at about 60 percent capacity, so there is scope for growth. Secos will introduce new technologies over the next six to nine months and be "more aggressive" in seeking new markets. Walters will not detail the technologies planned. The plant predominantly manufactures release liners for the hygiene market.

Walters said Secos's China operation is "under review" but there are no plans to close it. "We will always have a base there. We're streamlining operations to make it more efficient and looking at opportunities to automate what is currently a labor-intensive process."

He confirmed the Chinese arm is the only business unit not returning a profit.

The market for Secos's compostable and biohybrid resins is "not growing as fast as we would like" in Australia. Walters blames consumer confusion about oxo-biodegradability and compostable bioplastics, which he said "tarnished the image" for all bioplastics.

Walters expects the company's sales for the fiscal year ending June 30 to be similar to 2016's A$21 million (US$15.6 million).