Deals will spearhead company’s growth next year
GEORGE TOWN: PIE Industrial Bhd is currently negotiating for four major projects that will spearhead the company’s growth in 2018.
Group managing director Alvin Mui told StarBiz that the projects were to manufacture electronic systems for a wide range of industrial, energy, and telecom products.
“These are for our European and US customers.
“We expect to conclude the deals in the third quarter of 2017, while the contribution will materialise in 2018,” he added.
The telecommunications, security and industrial sectors should contribute over 40% to the company’s revenue in 2018 compared to less than 30% now, according to Mui.
“The telecommunications and security sectors in the US were projected to grow to US$20bil in 2016 because it covered a broad range of products such as critical telecommunication devices, smart cards and biometrics, as well as mechanical and electromechanical locks, and access controls,” he said.
Mui said the company was allocating RM15mil for capital expenditure in 2017.
“A portion of this budget will be used to expand our operations in Thailand, where the current work is focused on cable assembly.
“We want to expand the operations to include plastic injection moulding and surface mount technology (SMT) activities to produce electronic circuits for printed circuit boards assembly,” he said.
PIE’s computer numerical control (CNC) precision tooling division will start operations in the second quarter of this year in a new RM20mil facility in Seberang Jaya.
“The CNC division supports our plastic injection, metal stamping and electronic assembly operations by providing plastic and metal mould, jig and fixtures fabrication, to broadening our revenue base and more effectively support all existing customers.
“Our outsourcing cost to contractors in and outside the country will also be cut down substantially,” he added.
Mui noted that the company’s performance for the financial year ending Dec 31, 2017 (FY17) will improve over FY16.
“Our existing customers in the sensor, industrial, telecommunication, and medical equipment box-built sectors have ramped up their orders for 2017.
“A new growth area is our touch screen technology used in large display panels, which is expected to be a significant contributor in 2018,” Mui said.
For the fourth quarter of last year, PIE posted RM23.6mil in after tax profit on the back of a RM193.5mil turnover, compared to RM23.8mil and RM262.3mil achieved respectively in the previous year corresponding period.
For the whole of FY16, PIE recorded RM36.46mil in after tax profit on the back of a RM579.3mil revenue, compared to RM57.59mil and RM662.24mil achieved in FY15.
According to Freedonia, a Cleveland-based market research firm, the US market for security products and systems is expected to be about US$19.9bil in 2016.
“Rebounds in construction and capital investment spending are expected to be the primary growth drivers. A perceived high risk of crime and technological improvements to security technology will also play a role,” the report says.