2 biggest reasons behind Goodpack's sluggish quarterly revenues

Hopes now tied to rubber shipments.

According to CIMB, Goodpack has seen successive dips in quarterly revenues since 1QFY13, mainly due to 1) weak tyre demand as end-users extend the useful life of their tyres, and 2) weak synthetic rubber demand as customers whittle down inventory.

Synthetic rubber shipments are finally picking up though. CIMB noticed that there was a recovery in synthetic rubber shipments by Lanxess (one of Goodpack’s major customers) from Europe to Asia in May and June.

Here's more:

To cater to the specific requests of synthetic rubber clients, Goodpack has manufactured c.145,000 IBCs, or c.5% of total IBCs, in a larger-than-usual size (MB7).

Although the clients initially requested the new dimensions, they later recognised the MB7’s inefficiency as a 20’ container can fit only half as many MB7s as MB5s. As such, Goodpack is in the process of modifying the MB7 IBCs into MB5s, which will temporarily reduce their available fleet by 5%.

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