GEORGE TOWN: Riding on the rising global demand for home appliances, GUH Holdings Bhd is planning for two waves of expansion for its printed-circuit board (PCB) business.
Group managing director Datuk Kenneth H’ng told StarBiz that the expansion would be for its operations in Penang and China.
“More than RM10mil is allocated for the expansion of the Bayan Lepas plant. The expansion exercise should be completed in early 2019 and will raise our annual output here.
“The expansion should contribute to our financial year ending Dec 31, 2019,” he added.
The group is also planning to have a new production facility near Suzhou, where its existing plant is located.
“The expansion in Penang will increase the PCB production output here by 25%.
“The production in Suzhou is 90% utilised, so it is necessary to expand. We are now studying the budget for the expansion in China,” he added.
According to online business intelligence portal Statista, the home appliances segment is projected to grow at a compounded annual growth rate of 9.4% from 2018-2022 to reach US$109.8bil from US$76.6bil in 2018.
GUH’s PCBs are used by major brandnames of home appliances.
“A washing machine or refrigerator has one to two single-sided or double-sided PCBs in it,” he added.
The PCB revenue of GUH is projected to grow at about 5% for the first half of 2018, compared to the same period of 2017. The group’s PCB revenue for the six months of 2017 was RM140mil.
Moving ahead, GUH wants to grow its PCB business in the automotive market. “Now, the automotive segment is about 10% of the group’s revenue,” he added.
According to Euler Hermes, the world’s leading trade credit insurer, worldwide vehicle sales will reach 98.2 million units in 2018 before topping 100 million in 2019.
Quoting Euler Hermes, H’ng said China would lead the way as the largest contributor to sales growth with India coming in second, more than offsetting the decline in the US and UK sales.
On GUH’s property business, H’ng said the group was now redrawing the plans for a mega-township project for launch in 2019 in Simpang Ampat.
“There would be commercial, residential and high-rise components for the mixed-development scheme. We are now planning the GDV for it,” he added.
According to H’ng, the unbilled sales for the property segment is about RM20mil for 2017.
“This comes from our Taman Bukit Kepayang project in Seremban, where the properties, comprising terraced and semi-detached houses, are sold between RM600,000 and RM1.5mil.
“We sold 30% of the 200 houses launched last year in Taman Bukit Kepayang,” he added.
On its water treatment segment, H’ng said the group was now negotiating for RM500mil worth of projects in the country.
It is now carrying out works for seven projects with a contract value of RM150mil.
“These projects, with an unbilled sales of RM80mil, are scheduled for completion in 2020,” he added.
The group currently has about RM100mil in cashflow and an undeveloped land bank of 620 acres in the country.
The land bank is located in Taman Bukit Kepayang (150 acres), Kuala Muda, Kedah (385 acres) and Simpang Ampat (70 acres) and Sungai Bakap (90 acres) in Penang.