BUKIT TENGAH: Chin Well Holdings Bhd expects its wire mesh business to boost the group’s performance for the financial year ending June 30, 2018 (FY18).
Group executive director Tsai Chia-ling told StarBiz that the orders for wire mesh will come from a United States customer based in Kedah.
“We expect orders from the customer to surpass about 400 tonnes per month, growing gradually from the current quarter.
“The orders were coming steadily in FY17 but slowed when the company was in the process of implementing its acquisition exercise. Now that the acquisition exercise is completed, the orders are picking up again and are likely to surpass 400 tonnes a month,” she said.
Tsai added that more resources would be allocated to increase the production capacity for wire mesh products to meet the rise in wire mesh sales.
“We are confident that the expansion in this production will contribute positively to the group’s performance in FY18,” she said.
The group’s wire mesh products are produced by Chin Herr Industries (M) Sdn Bhd, the group’s wholly owned subsidiary in Bukit Tengah.
On the domestic sales of its fastener products, Tsai said there was a slowdown in orders from the government sector.
“The private sector, however, is still buying,” she added.
Moving forward, Chin Well expects to secure more orders, as it is expecting about 200 foreign workers to arrive in December.
“We can look forward to improving our sales and bottom line for FY18. We expect the global market for industrial fasteners to grow in tandem with the positive outlook on the automotive and manufacturing sectors and the overall economy,” she added.
According to Tsai, the group plans to raise the contribution from its do-it-yourself (DIY) fastener segment through the increase of the distribution network in the Europe and US market.
“As for our fasteners, we do not expect a price war from China in view of rising manufacturing costs (there), following greater environmental awareness and the Chinese government’s implementation of the Urban Blue Sky Project.”
According to Zion Market Research, the global industrial fasteners market was valued at US$84.9bil in 2016. It is expected to reach US$116.5bil in 2022 and is anticipated to grow at a compounded annual growth rate of 5.4% between 2017 and 2022.
“Furthermore, strong recovery in construction and the automotive segment is sustaining growth in the developed countries.
“In addition, the rising demand for high-value titanium fasteners in aerospace applications and lightweight plastic fasteners in automotive is expected to drive the demand in the near future,” the report said.