Machine manufacturer innovates to keep up with smart factory standards

PENANG-based MH Multipack Sdn Bhd, an automated packaging machine manufacturer, is looking to penetrate the European market by 2021.

In preparation for that plan, it is shoring up its capacity with a new manufacturing facility in Batu Kawan, which will begin operations around that time.

“We have a one-acre site in Batu Kawan where we will invest RM10mil for a 35,000sq m manufacturing plant.

“Construction of the facility will begin in 2020 and should be ready for operations in 2021,” says its managing director Ooi Meng Huat, 60.

This will increase the group’s production which will enable it to supply to not only Europe, but also the Middle-East and South-Asia, where the demand is expected to grow.

MH Multipack manufactures packaging machines for the pharmaceutical industry. The machines are designed to pack liquid and powdered pharmaceutical products into bottles and tubes.

The company produces stand-alone machines as well as machinery for packaging lines.

According to The Business Research Company report, the global pharmaceuticals market was valued at US$934.8bil in 2017 and is expected to reach US$1.170 trillion in 2021, growing at 5.8% per annum.

“The growth of the global pharmaceutical market is steady, so we have to be ready to expand to supply to new markets.

“Currently, about 40% of our machinery is sold to the domestic market, while the remaining 60% is sold overseas,” he says.

“The Asia Pacific market is growing due to the availability of affordable drugs, government programmes to support healthcare, and rapid urbanisation that brings both doctors and pharmacies within the reach of the population.

“Currently, Western Europe still accounts for 56% of the global pharmaceutical market,” adds Ooi.

According to Ooi, the company is now developing packaging machinery that are compliant with the standards and requirements of a smart factory.

“These fourth generation packaging machines will be out this year,” he says.

Ooi is expecting a 20% growth in revenue this year. Last year, MH Multipack generated RM10mil in sales.

“We manufacture 40 to 50 machines annually. Each unit is priced between RM100,000 and RM800,000, depending on the complexity and functions of the machine.

“A packaging line could cost up to RM3mil,” Ooi says.

Meanwhile, MH Multipack business director Jeff Chong Chin Guan, 45, recalls that the company experienced its most difficult period about 10 years ago when it invested substantially to develop stand-alone machines.

“The market was bad then and it took about five years before we could see returns on our investment in the designing and development work,” Chong says.

Chong is also a co-founder of the company.

Both Chong and Ooi were graduates in the field of electrical and electronic engineering and had worked in multinational corporations prior to founding MH Multipack.

“In 1998, when many MNCs cut back their investments in Malaysia, we resigned from our jobs and founded MH Multipack.

“We felt that in order to move on, we would need to have our own business and brand,” Chong shares.

According to Chong, MH Multipack’s machines are about 50% cheaper than those made in Europe.

“The quality of our machines is the same as the European-made ones.

“Against Korean machines, we are about 10% cheaper.

“We invest 5% of our revenue for design and development work yearly as innovation is key to compete in the technology market,” Chong reveals.

He adds that MH machines are popular in the local market because they adhere to the Good Manufacturing Practice standards.

“We supply to 80% of the pharmaceutical companies in Malaysia.

“Our customers include B Braun, Kotra Pharma, Zontron, Dynapharm, Zontron, and Upha Pharmaceuticals,” Chong says.

At the moment, the company’s main markets are Thailand and Indonesia.

Moving ahead, Chong says the company plans to bring in new investors that will help it grow further.

“We are also planning to get listed in the Ace market or LEAP Market in 2021,” Chong says.

MH Multipack currently operates in a 20,000sq ft plant in Bukit Mertajam, employing 50 workers.

The company received the Platinum award for Best innovation at The Star Outstanding Business Awards (SOBA) 2017 in the up to RM25mil revenue tier.

Source: https://www.thestar.com.my/business/smebiz/2019/01/21/eye-on-the-european-market/
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