Tuesday, March 18, 2003
NTPM to diversify current product baseBY HANIM ADNAN
NTPM Holdings Bhd , one of Malaysia's largest manufacturers of tissue paper, toilet rolls and paper products, plans to strengthen its position in the local market while expanding overseas and di-versify its current product base over the next five years.
The group, which is en route to a listing on the KLSE main board, has continuously worked towards establishing its brand names such as Premier, Fu-Kui-Hwa, Cutie, Royal Gold Interleaf and the latest brand ConviRoll in Malaysia, Singapore and Hong Kong through en-hancing the features and quality of its products.
Under its initial public offering (IPO), NTPM has made an offer for sale of 242.98 million shares of 10 sen each at an offer price of 50 sen per share.
In its prospectus released yesterday, NTPM said that as part of its strategy to fully realise the benefits from the Asean free trade area (Afta) implementation this year, it planned to establish a stronger foothold in Brunei, the Philip-pines, Thailand, Myanmar and Cam-bodia.
With the implementation of Afta, the group intends to strengthen its distribution channels and establish new production facilities in these Asean countries beginning from the 3rd quarter of this year not only to serve as agents for the local distributors but as a market player in the local market under its own brand names.
It is also targeting to export to Vietnam by mid-2006 and southern China by mid-2007.
These overseas markets with high population offer a vast opportunity for consumption of tissue paper and toilet rolls, thus enabling the NTPM group to expand its existing customer base, NTPM said.
It said the business expansion would be implemented through setting up regional marketing offices in the res-pective countries or by acquiring existing distributors in the local market.
Apart from establishing new distribution channels and marketing network, the group also intends to build manufacturing plants on a joint-venture basis with local manufacturers in the longer term in countries like Thailand, Myanmar and China from the 2nd quarter of next year onwards.
This is expected to benefit the group in terms of cost savings as the production costs in these countries are comparatively lower due to the lower labour costs, it said.
It said that production activities un-dertaken in these countries would al-low NTPM to meet prompt delivery and minimise distribution costs in-curred for exporting its products.
Apart from expanding into Asean, the NTPM group is also expanding its market share in Malaysia particularly in the commercial sector such as hotels, large corporations, industrial and commercial properties, and shopping complexes.
According to a Back Data Report for Year 2000, 2001 and 2002 by ACNielsen Retail Measurement Services, the NTPM group is the market leader with over 50% share in the tissue paper and toilet rolls market in the peninsula last year through its popular brand names like Premier and Cutie.
The NTPM group has been increasing its market share in terms of sales volume over the years to 60% last year in the facial tissue market and 51% in the toilet paper market in peninsular Ma-laysia respectively.
The manufacturing operation of the NTPM group is carried out by its wholly-owned subsidiary Nibong Tebal Pa-per Mill Sdn Bhd at its 17.07 acre factory at Nibong Tebal. It currently operates at 80% of its total production capacity, producing 120 tonnes daily or 43,200 annually.
Apart from manufacturing tissue paper and toilet rolls, the group is also engaged in printing business via its 60% subsidiary Jia In Sdn Bhd at Bukit Mer-tajam, which produces 5.3 million tis-sue boxes for Nibong Tebal Paper Mill for its packaging purposes.
Under trading operations, wholly-owned subsidiaries Nibong Tebal En- terprise Sdn Bhd and Nibong Tebal Paper Products Pte Ltd service the domestic and Singapore markets respectively.
For the financial year ended April 30, 2002, the group registered a pre-tax pro-fit of RM35.9mil on the back of RM 181.7mil in turnover.