Ex-Pack Corrugated Cartons going for IPO to raise funds for factory expansion

‘Ever-increasing demand for corrugated carton products’

By Hiran H.Senewiratne

Ex-Pack Corrugated Cartons Ltd. will go for an Initial Public Offering (IPO) which is to be closed on October 22. The aim of the IPO is to raise funds for a major factory expansion facility to cater to the ever increasing demand for corrugated carton products.

“It is with great pleasure that we welcome the public to consider joining us on our journey towards emerging as the most preferred corrugated cartons supplier in Sri Lanka. At present, our 295-strong team produces 2,650 metric tons (MT) of corrugated cartons per month at our 203,000 square-foot facility, Managing Director, Ex-Pack Corrugated Cartons Ltd. Zulficar Ghouse said.

Ghouse said the company has designed and implemented a comprehensive medium to long-term growth strategy, which includes a new, ultramodern Rs. 3 billion production plant, for which the company has already secured the bulk of funds internally and through debt financing. This new plant will almost double the company’s capacity to 4,000 MT by 2025.

The media conference to announce the IPO was held yesterday at the Cinnamon Grand Hotel, Colombo.

Ghouse added: “The estimated Rs. 700 million we intend to raise through our IPO will be channeled towards this effort, giving us maximum potential for growth. I take this opportunity, in advance, to welcome our new shareholders and thank all investors who subscribed for placing their faith in us.

“The company is planning to set up a new factory on a ten-acre land. The funds that are coming from the IPO will used for that purpose.

“The company’s prospectus has already been officially published on the website of the Colombo Stock Exchange (CSE). Ex-Pack is a wholly owned subsidiary of Aberdeen Holdings, previously known as Expolanka Investments, one of the most diversified of family businesses for over 30 years.”

“Managed jointly by Capital Alliance Ltd. and Asia Securities Ltd., Ex-Pack Corrugated Cartons is expected to offer 83,333,333 ordinary voting shares at a price of Rs. 8.40 per share through its IPO, resulting in a projected market capitalization of Rs. 2.8 billion. This translates into an estimated forward PER of 7.7x for FY22 and implied TTM PER (as at August 2021) of 8.9x, Senior Vice President- Head of Equity Capital Market Rizny Faisal said.

Ex-Pack Corrugated Cartons has spent over two decades in the packaging industry while acquiring an extensive clientele comprising corporates and brands from over eight countries. In Sri Lanka, Ex-Pack leads in production and exports which account for 52% of revenue being generated in US dollars. The company has emerged as a full-service corrugated cartons solutions provider, currently producing one out of every five cartons in Sri Lanka.

The company’s product portfolio includes regular slotted cartons, die-cut cartons, laminated cartons, and a host of specialized products developed using recycled material. Ex-Pack also worked with the Department of Elections of Sri Lanka in transforming ballot boxes by crafting them out of corrugated cartons during the 2020 general election. The company serves top corporate customers and sectors worldwide, including FMCG, consumer durables, apparel, tea, and fisheries.