TOMISHO Holdings Bhd's newly-appointed managing director Ng Ah Chai has pledged to steer the furniture-making company to profitability in two years via strategies that include going upstream.
Ng, who was formerly an executive director of Tomisho, has emerged as the company's substantial shareholder with an equity stake of 17% after acquiring 6 million shares in the company from Eastern Premium Sdn Bhd, a company associated with former managing director Lim Eng Huat, for RM1.50 a share. Lim is now chairman of Tomisho.
“We have strategies to turn the Tomisho group around and these include cost cutting measures and ways to improve efficiencies, especially in our operations in Klang, which have been making losses,” Ng told a group of journalists after a tour of the Seng Yip Furniture Sdn Bhd plant in Semenyih yesterday.
The 41-year old Ng was the managing director of Seng Yip Furniture, a subsidiary of Tomisho, prior to his present appointment.
Seng Yip Furniture recorded a pre-tax profit of RM2.7mil last year while the group's other major subsidiary, Tomisho Sdn Bhd based in Klang, Selangor, posted a loss of RM8.7mil last year.
Ng said the group had decided to sell its land, factory and office building in Klang to its major shareholder, Perbadanan Nasional Bhd – which holds 18% stake in the company – for RM16mil cash to repay its bank borrowings. Following the disposal, Tomisho would rent the properties from PNB.
Tomisho, he added, had also proposed a rights issue with warrants to raise up to RM43.6mil, of which RM19mil would be used to hedge its bank borrowings which stood at RM79mil as at June 30.
“We will emerge a stronger company with lower gearing and be in a position to achieve rapid growth with the completion of the rights issue and sale of the property in Klang,” Ng said.
Ng said there was still a huge international market for the group's rubberwood furniture, which included chairs, dining sets and beds, despite stiff competition in the country and in the neighbouring countries.
“To ensure a constant and cheaper supply of rubberwood, we have decided to go upstream via a rubber tree replanting scheme,” he said, but added however, that there was enough rubberwood supply in the country to last the company for the next 10 to 15 years.
“Our rubberwood furniture industry has been growing steadily over the past few years except in 2001 when we experienced a sharp downturn.
“We are optimistic that the demand will grow next year as it is well accepted, especially in the US,” he said.
The group exports almost all of its rubberwood furniture output to about 400 companies in 80 countries.
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