Sustainable and eco-friendly bioplastics developer Secos Group has decided to cease the business operations of its wholly owned subsidiary, Stellar Films Australia (SFA).

The company has made this decision as part of the strategic review through an independent consultant, Promentor.

As per the strategic review, Promentor suggested the company relocates the current plastic film production from its facility in Melbourne to production facilities in Malaysia to achieve significant operating and overhead cost savings.

After a transition period, the company expects most of its Australian customers to transfer their business to its Malaysian operations.

Other elements related to ceasing Australian manufacturing operations include transferring some SFA staff to anywhere within Secos Group, notify employees and landlord, make redundancy payments, sell remaining stock, equipment and parts, as well as terminate the lease.

“The decision by the Board to cease operations in Australia is an important step to further lower Secos Group’s cost base.”

Secos executive chairman Richard Tegoni said: “The decision by the Board to cease operations in Australia is an important step to further lower Secos Group’s cost base and to consolidate and optimise its manufacturing assets.

“With this improved structure, we expect to continue to deliver significant growth in bioplastic resin sales, and over time upgrade our world-class hygiene film production to support compostable and breathable film for the large and attractive feminine and infant hygiene markets.”

SFA will use Malaysian operations to produce the product and sell film after the completion of cessation. The company will also repay bank debt in accordance with its loan agreement.