POHMAY Holdings Bhd, a Bursa Malaysia second board company specialising in producing rattan and hardwood furniture, plans to expand its rattan furniture manufacturing facility in Sabah this year.
Managing director Lee Peng Joo told StarBiz that the rationale for expanding the operations there was the availability of competitively priced rattan in Sabah.
Last year, we had bought a rattan plantation to prepare for our expansion in Sabah. We will expand the production capacity of our existing manufacturing facility in Tawau, in operation since last year,'' he said.
Lee said with the expansion completed, the plant would be able to produce between 15% and 20% of the groups annual output of rattan furniture.
The remainder of the groups rattan furniture is produced in Parit Buntar. The group's rattan furniture is exported to the United States and Europe.
Lee said the group had also secured contracts totalling RM5mil for custom-made furniture, made of hard wood and metal, for its customers in the country.
He said the group was now in negotiations with the education and health ministries to supply custom-made furniture.
Lee also said Pohmay had plans to enter the Iraqi market.
We are now negotiating with the private and public sectors in Iraq to supply various types of furniture. Our hardwood furniture is suited for use in the Middle-East because of the hot weather, he said.
Lee said the group was now working out a one-for-one rights issue exercise to raise RM60.5mil to reduce bank borrowings and use as working capital.
The rights issue would be implemented soon, he said.