Consumer products going strong

GEORGE TOWN: Consumer product manufacturers in Malaysia exporting to emerging economies are expecting growth next year despite a weakening global economic environment.

CT Frank Technology Sdn Bhd, Daewoo Electronics (M) Sdn Bhd and Pensonic Holdings Bhd are among the companies that are expecting stable overseas sales as their products are still in demand from the emerging economies.

CT Frank chief executive officer Beh Cheng Siong told StarBiz that the company's cathode ray televisions (CRTVs) were the key driver of growth.

“The CRTVs are selling well in the emerging economies of the Middle East and Africa, as they are priced around US$60 for a 21-inch CRTV.

“We are able to produce them cost effectively, as the raw materials for the CRTVs are purchased in bulk with competitive pricing from overseas. CRTVs are expected to be in demand till 2015,” he said.

The Middle-East market generates about 40% of CT Frank's revenue, while South-East Asia and Africa contributes 20% and 40% respectively. Particularly important for the company are markets in Saudi Arabia, which served as a distribution hub for the company's products in the Middle East region, Botswana in South Africa, Thailand and Vietnam.

CT Frank produces about 300,000 units of CRTVs yearly under its own brand name ISONIC, of which 30% are sold in the local market.

Besides CRTVs, the company also manufactures fans, LCD televisions, and DVD players in Malaysia.

“We plan to introduce new products such as jug kettle and shower heater under the ISONIC brand name for the domestic market.

“Presently we produce about 250,000 LCD televisions, fans and DVD players for the local market,” he said. Beh said the company expected its revenue, of which about 50% would be generated from export sales, to increase by 15% this year from RM60mil achieved in 2010,

“Next year we still forecast about a 15% growth,” he said.

CT Frank manufactures from a 120,000 sq ft facility in Kamunting Industrial Estate, employing 350 workers.

Pensonic Holdings Bhd also expects the emerging markets in South-East Asia, the Middle East, and African countries to generate steady revenue for the group next year.

Group managing director Dixon Chew said of particular importance were countries such as Nigeria, Angola, and South Africa, Vietnam, Indonesia, and the Philippines, as they had strong growth potential.

“Although Pensonic has just entered into the emerging markets, we expect steady contribution from them beginning next year.

“With the boost from these emerging markets, we expect the contribution of overseas sales to rise to 40% in three years from about 20% presently,” Chew said.

On the domestic market, Chew said the group expected slight growth in sales this year.

“In a challenging economic climate, it is the branded consumer products manufacturers and established retail brand names that are able to sustain and grow their business,” he said.

Daewoo Electronics (M) Sdn Bhd is also expecting about a 10% growth in revenue next year from the RM80mil revenue targeted for 2011.

Daewoo director Lim Kai Seng said the company was expecting demand from Thailand for the company's micro waveovens and washing machines to surge next year, as the flood had damaged a lot of home electrical and electronic appliances.

“Because of the flood in Thailand our washing machine and microwave oven exports will hit only about 160,000 units this year, compared with about 240,000 in 2010.

“But in 2012, due to replacement orders, our sales will pick up,” Lim added.

The key markets of Daewoo Electronics are Thailand and Indonesia which collectively generate about 60% of the company's revenue, while the Philippines contribute about 15%, and Malaysia the remaining 25%.

According to the Business Monitor International report, the Malaysia consumer electronics devices market, comprising computing and audio visual devices, was projected reach about US$10.7mil in 2011.


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