Dufu aims to operate metal fabrication plant by June

In a filing to the stock exchange, the group said its rationale for the exercise was to reward its existing shareholders for their loyalty and continued support.

GEORGE TOWN: Dufu Technology Corp Bhd plans to operate its new metal fabrication production facility by June this year.

According to group chief executive officer BH Yeoh, the group had invested RM11.4mil for the production facility in Bukit Minyak late last year to manufacture metal fabrication products for the semiconductor and medical equipment industries.

He told StarBiz that Dufu Technology subsidiary, Dufu Metal Sdn Bhd, has been set up to oversee the business, which is low-volume and high-mixed in nature with strong growth potential

To date, the company has already received encouraging enquiries from the semiconductor and medical equipment sector.

Yeoh expects that the metal fabrication, sensor and hydraulic device business segment would generate about 25% of the group’s revenue.

The hard disk drive (HDD) component business, meanwhile will contribute the remaining 75%.

He pointed out that Dufu Technology is planning to allocate RM15mil for its business expansion this year, compared with RM12mil in a year earlier.

“Although the shipment of HDD drives worldwide has decreased, demand for spacers used in HDD unit has surged due to the demand for increased data storage space.

“Previously, a HDD used fewer than five media disks, requiring only four pieces of spacers to separate them.

“Now HDD used in the enterprise segment uses up to nine media disks and requires eight pieces of spacers to separate them,” he added. Yeoh said HDD remained the priority for data centres looking to optimise their total cost of ownership by cramming as in a single storage for home consumers who opt for 10 terabyte plus of data.

Moving forward, Yeoh said the group planned to tap into the automotive industry and currently in the process of obtaining the IATF 16949 certification. “With the certification, we can then plan to produce machined parts for the automotive sector, which we believe has strong growth potential,” he added.

On dividends, Dufu is proposing to give one treasury share for every 20 existing ordinary shares in the second half of 2019. According to Market Reports, the global auto body parts market, which is valued at US$29.7bil in 2018 is expected to reach US$38.4bil by the end of 2025, growing at a compounded annual growth rate of 3.8% during 2019-2025. The global auto body parts market includes automotive sunroof, windshield wiper, door lock, exterior rear view mirror, door handle and roof-rack manufacturers.

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