PT Megalestari Epack Sentosaraya Tbk (EPAC) is preparing to expand its business by establishing a new production facility in Surabaya in 2027 through its subsidiary, PT Epac Flexibles Indonesia (EFI).
The expansion is part of EPAC’s strategy to strengthen its flexible packaging business based on digital printing technology and to improve the company’s financial performance. The new Surabaya facility will complement EFI’s existing digital printing operation in Tangerang.
Currently, EPAC operates its flexible packaging business through two production methods. The company produces conventional flexible packaging using rotogravure printing technology through its main entity, while EFI operates a flexible packaging business utilizing digital printing technology.
This combination allows EPAC to provide greater flexibility to customers in terms of order volumes and pricing. However, despite improvements in operational performance through the second quarter of 2026, the company continued to face challenges in generating consolidated profits.
One of the factors affecting EPAC’s consolidated performance has been the operation of its conventional production facility. As a result, the company plans to cease operations at the conventional facility by December 31, 2026.
Following the closure, EPAC intends to focus its flexible packaging operations entirely on EFI’s digital printing platform. The company will operate digital printing facilities in Tangerang and, subsequently, Surabaya.
With the addition of the Surabaya facility and the transition toward digital printing, EPAC expects to improve its gross profit, operating profit, EBITDA, and net profit on an annual basis. The company’s projections cover the 2027–2030 period and take into account the impact of discontinuing the conventional MES facility and expanding EFI’s production capacity.
Management projects that the additional production capacity will enable EPAC to maintain annual sales growth of approximately 15% through 2028. The expansion is therefore expected to become an important component of the company’s medium-term growth strategy.
Based on the company’s projections after taking into consideration the discontinuation of the conventional facility and the planned business expansion, management estimated an indicative fair value for EPAC shares of Rp163 per share, based on a combination of the Discounted Cash Flow (DCF) and EBITDA multiple valuation methods.
The company also emphasized that these projections constitute forward-looking statements, reflecting management’s expectations regarding future business conditions and performance. Actual results may differ materially from these projections.
