UPM Adhesive Materials expands Malaysian factory to meet growing label demand

MALAYSIA – UPM Adhesive Materials has announced a significant investment in its label material factory in Johor Bahru, Malaysia, to enhance production capabilities and meet rising demand in Southeast Asia’s pressure-sensitive label market. 

The project, which began in April 2025, includes a new coating line and upgrades to facility infrastructure and material handling systems. 

The enhancements are set to improve quality and efficiency, with the new line expected to be operational by mid-2026.

According to the company, the investment will increase annual production capacity, enabling better service for customers across the region. 

The upgrades will also introduce advanced filmic capabilities, allowing the factory to produce specialized labels for high-value applications such as electronics and durable goods. 

Henning Krebs, Vice President for APAC at UPM Adhesive Materials, stated, “This investment shows our commitment to growing in the dynamic Southeast Asian market.” 

He added that the new coating line, combined with UPM’s technical expertise, will deliver improved quality and services to customers.

Southeast Asia is one of the fastest-growing markets for pressure-sensitive labels globally, driven by demand in packaging, electronics, and consumer goods. 

The Johor Bahru factory’s enhanced capabilities aim to address these needs with greater reliability and efficiency. 

The investment also supports UPM’s broader strategy to expand its footprint in the region, where it already employs around 3,200 professionals globally and reported sales of approximately US$1.7 billion in 2024.

In a related development, a recent industry report highlighted that UPM has also invested in its North American operations, announcing plans in July 2025 to expand label material production capacity in the United States. 

This move targets similar high-value markets, including advanced labels for electronics and sustainable packaging solutions, indicating a global push to meet rising demand for specialized adhesive products. 

The company’s focus on sustainable materials was further emphasized in its 2024 sustainability reports, which noted recognition from EcoVadis for its environmental and social performance.

The Johor Bahru investment is expected to create new opportunities for local stakeholders, including woodworking and packaging industries, by providing a steady supply of high-quality label substrates. 

With the new coating line, UPM aims to cater to the region’s growing need for durable, specialized labels, ensuring faster delivery and improved supply chain reliability for its customers.

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