Chin Well banking on Vietnam operations

Group director Tsai Chi-yun(inset) told StarBiz the group was making plans to raise contribution from Vietnam, which is focused on manufacturing do-it-yourself (DIY) and industrial fasteners. The group produces about 3,800 tonnes of fasteners a month in Vietnam. (Pic shows Chin Well Holdings Bhd Vietnam Manufacturing Complex - file pic))

GEORGE TOWN: Chin Well Holdings Bhd is looking to its operations in Vietnam to play a bigger role in contributing to group revenue, as the problem of hiring foreign labour hinders its growth in Malaysia.

Group director Tsai Chi-yun told StarBiz that the group’s manufacturing facility in Bukit Minyak, Seberang Prai, Penang, was now operating on one shift, using about 45% of its production capacity, due to a shortage of foreign labour.

“We have to be very selective as to whom we take our orders from. Long-term customers and projects with higher margins are our preference,” she added.

The annual production for the financial year ended June 30, 2014 (FY14) was 110,236,574 tonnes compared with 105,487 tonnes in 2013.

“For FY15, we can expect only a slight growth in the annual output from the plant in Bukit Minyak because of the labour restraint,” she added.

Tsai said the group was making plans to raise contribution from Vietnam, which is focused on manufacturing do-it-yourself (DIY) and industrial fasteners.

The group produces about 3,800 tonnes of fasteners a month in Vietnam.

“We are in the process of securing a US customer’s order for high-end DIY fasteners.

“The other customers are in Europe.

“The target is to raise the contribution from Vietnam to 40% by 2017 from more than 30% at present,” she said.

Tsai said the group also expected the European market to contribute about 56% to turnover in FY15 ending next June, similar to the amount contributed in the 2014 fiscal year.

“We do not want to be too dependent on Europe, so we are looking to expand other markets such as the US for our DIY fasteners,” Tsai said.

On Chin Well’s wire business, she said the group was now producing new fencing products for the security market in Malaysia, Taiwan, Australia and the Middle East.

“We also hope to raise the contribution from this segment to group revenue from about 30% at present,” she added.

On the domestic and Asian markets, which contributed about 30% to group revenue in FY13, she said “they are expected to generate less than 25% for FY15”.

For FY14, the group posted a net profit of RM41.6mil on the back of RM485.3mil in revenue. That compares with net profit and revenue of RM32.5mil and RM461.8mil, respectively, in FY13.

Tsai said the outlook for the global political and economic condition was uncertain, and that the group would continue with ongoing efforts to raise operational efficiency and productivity so as to further enhance its competitive edge in the challenging market environment.

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