Opcom to double fibre-optic cable production

Opcom Holdings Bhd expects to raise its fibre optic cable production volume to about 2,500km per month from the current 1,200km by 2005, said chairman and managing director Datuk Mukhriz Mahathir.  

He said the company, which mainly produces slotted fibre optic cables, was expanding its RM40mil manufacturing plant in Shah Alam to cater to the rise in demand for loose tube fibre optic cables. 

Datuk Mukhriz Mahathir (left) showing the company's fibre optic cable to AmMerchant Bank Group MD Cheah Tek Kuang after the signing.

“The new fibre optic cables will be in production by the second quarter next year. It will take some time before we can achieve the targeted kind of volume,” he told reporters after signing an underwriting agreement with AmMerchant Bank Bhd and AmSecurities Sdn Bhd in Kuala Lumpur yesterday, in conjunction with Opcom's listing on the Mesdaq market.  

“We will first focus on fulfilling the local demand and will later look into exporting to neighbouring countries,” he said, adding that the company already exported a small amount of fibre optic cables to countries in Africa, the Philippines, Sweden and Brunei.  

He said the new production line would impact sales in the financial year (FY) ending March 31, 2005.  

Declining to disclose revenue projections for the current year, Mukhriz, however, said the company was targeting a 25% increase in revenue for FY2005 from the RM46mil achieved in FY2003. Opcom achieved a pre-tax profit of RM8.8mil in FY2003. 

Based on the company's research, Mukhriz said the local fibre optic cable industry had netted revenue of about RM60mil last year and was growing by 15% to 20% yearly. 

The company is the leading fibre optic cable manufacturer in Malaysia with about 65% to 75% market share. Its biggest client is Telekom Malaysia Bhd, accounting for about 70% of Opcom's revenue. 

Opcom, which hopes to be listed early next year, is a 70:30 joint venture between Opcom Holdings Bhd and Ericsson Cables AB of Sweden. 

The company expects to raise RM20.8mil from its flotation exercise which involves a public issue of 26 million new shares of 20 sen each at an issue price of 80 sen per share. 

Of the total, 17 million shares will be placed out to selected investors, 1 million allocated for public subscription and 8 million for eligible directors and employees of the Opcom group.