Astino to gain from housing revival plans

ASTINO managing director Ng Back Teng

GEORGE TOWN: The Government’s efforts to revive abandoned housing projects are expected to improve Astino Bhd’s performance by a single-digit percentage for the 2015 fiscal year ending in July.

Group managing director Ng Back Teng told StarBiz that the Government’s efforts to revive 74% of the abandoned housing projects in the country, as announced by Prime Minister Datuk Seri Najib Tun Razak last December, would stimulate the demand for roofing products and other building materials.

Najib had said that 10.7% more or 23 projects were in the process of rehabilitation, while 15.3% or 33 projects were in the planning stage.

“We can expect the pending goods and services tax (GST) implementation to slow down the sales of roofing products and other building materials next month.

“But the impact should be just temporary,” he said.

The Federal Government’s decision to maintain its RM48.5bil development expenditure in the revised Budget 2015 is also expected to drive the growth of the construction sector, creating spillover effects for Astino, which also sells building materials.

“These projects included the Sungai Besi-Ulu Kelang Elevated Expressway, Damansara-Shah Alam Elevated Expressway, the East Klang Valley Expressway and the Kinrara-Damansara Expressway.

“In the pipeline are Government-backed projects such as the Tun Razak Exchange development, the Warisan Merdeka skyscraper, the redevelopment of the Pudu Jail site and the remainder of the Mass Rapid Transit line network,” he said.

For the month of February, Ng said the market demand for steel coil and roofing products was expected to slow down due to the pending GST.

“When the new plant in Bukit Beruntung starts operations in March 2015, it would be just in time to supply to the demand from the revival of abandoned housing projects and the ongoing infrastructure projects.

“We expect the plant to generate about RM6mil per month after its third year of operations.

“It is expected to generate about RM4mil to RM5mil in revenue per month once it starts operations,” Ng said.

On its multi-system agro-house business, Astino will spend more than RM100mil next year to expand the business in Penang.

“We want to set up another multi-system agro-house production facility to raise the contribution of the business to group revenue to 15% in two years.

“Currently, Astino exports the multi-system agro-houses to the Philippines and Indonesia. We are now looking for new customers in Sri Lanka and Vietnam,” he said.