Export sales on the uptrend


BY ELAINE ANG

INDUSTRY players are confident of better prospects for export sales going forward, thus auguring well for the economy and cementing the fact that the country's exports are still in demand.  

Asia File Corp Bhd, which exports files and stationeries, anticipates an increase of 25% in its export business in 2004 based on the orders received and its recent successful tenders in Europe. 

Dr Lim Wee Chai

Its executive chairman Lim Soon Huat said the addition of quality new products and its acceptance in the international market would augur well for the future prospect of the company's export business. 

He said export sales for the year ended March 31, 2003, rose by about RM3.5mil compared with 2002. “The increase was due to our new range of products which was very well received by our overseas customers. Also, efforts to make inroads into developed markets have also started to yield results,” he added. 

Exports constitute 60% to 65% of Asia File's total sales. Its major markets are Europe, Japan and the United States.  

“New growth markets for the company were developed markets with huge consumer buying power like Europe and the US,” he said, adding that a recovering global market was good news to the company as this would increase demand for its products.  

Ta Ann Holding Bhd chief executive officer Wong Kuo Hea said that for the first half of 2003, the company's revenue jumped 26.5% to RM165.3mil compared with the corresponding period in 2002, mainly due to higher export sales volume and better selling prices.  

The company's new subsidiary, Raplex Sdn Bhd, which owns a forest concession in Sarawak, also partly contributed to the higher revenue. 

Teh Chin Bin

The company's main products are logs, plywood products, sawn timber and moulding products. Almost 100% of the products in 2002 were exported to countries like Japan, India, the US, Europe and South Korea. 

“Our main plywood market is Japan, which accounts for over 90% of plywood sales. Indications that the economy are recovering in Japan would increase the demand for our products,” Wong said, adding that plywood production had increased by 20% since the end of the third quarter.  

He said the recovering global economy, in particular the buyer countries, would be a positive factor for Malaysian products.  

“We strongly believe that the maintenance of product quality coupled with appropriate operational strategies should expand the market share of the group,” he said. 

Top Glove Corp Bhd president and managing director Dr Lim Wee Chai said despite the slowdown in most export sectors, the rubber glove manufacturer had remained resilient and fared well in 2003.  

“This is mainly attributed to the increase in health awareness among end users in the world, coupled with the presence of diseases like AIDS, SARS and the Anthrax scare,” he said, adding that there was also a general increase in glove usage. 

Top Glove generated a return on equity of 20%, with sales revenue growth of more than 30% for the year ended Aug 31, 2003. 

Lim said as the company exported over 95% of its production, it would benefit directly from an improved global economy.  

“We are expecting to double our profitability, capacity and operation every three years, in view of our average growth of more than 30% yearly,” he said. 

He said global demand for latex disposable gloves was quite inelastic and expected to grow steadily at 8% to 10% per annum.  

“The global demand for gloves is estimated at more than 70 billion pieces a year, providing expansion opportunities for Top Glove which currently has a world market share of 10%,” he said, adding that the company exported 7.2 billion pieces of gloves per year to more than 128 countries, mainly to the US, Europe, Japan, the Middle East and Latin America. 

For the electrical and electronics (E&E) sector, the 19-member Malaysian American Electronic Industry (MAEI) grouping has forecast sales of RM64.2bil in 2004, compared with the RM59bil set for this year.  

However, this growth – a 9% rise – would fall short of the 14% year-on-year increase achieved over 2002 sales of RM51.3bil. 

MAEI members represent some of the largest US investors in Malaysia and include such heavyweights as Dell, Intel, Motorola and Seagate. 

In an earlier report, the group’s chairman Teh Chin Bin noted that with the current personal computer replacement cycles in the US likely to last through to 2005, as well as growth in the use of wireless communication, export sales should be much higher next year. 

“I am optimistic the industry will exceed this survey's forecast growth. Barring no major negative events worldwide, I believe 10%-15% growth for 2004 is a realistic assumption,” he said.  

On the slowdown in Malaysian E&E exports, which fell 8.6% during the first eight months of 2003, Teh said this did not affect MAEI members. 

He said export sales had been on an uptrend since the fourth quarter of 2002 and the firms were expecting a bumper current fourth quarter, traditionally the most buoyant in the year.  

Sales of the American firms had constituted a significant 24.5% and 14.5% of Malaysia’s E&E and total export earnings, respectively, last year. 

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