Pentamaster diversifies to broaden income base

Pentamaster executive chairman C.B. Chuah checking out test equipment produced for the automotive and semiconductor industries

GEORGE TOWN: Pentamaster Corp Bhd is diversifying to supply automation systems to the medical, consumer electronic, and logistic industries to broaden its income base.

Group chairman CB Chuah told StarBiz that the new business arm would contribute about 30% of the group’s revenue in 2020.

Pentamaster has successfully customised intelligent automated robotic manufacturing system (i-ARMS) for the medical, consumer electronic, and logistic industries.

“Our recently completed production plant in Batu Kawan has the ISO Class 9 environment certification that qualifies us to supply i-ARMs solutions for manufacturers of medical products and equipment.

“For 2018, the contribution from the new business segments to the revenue should be around 25%,” Chuah added.

For the logistic industry, Pentamaster has developed a scalable integrated solution, to be marketed under the i-Hub brand name, to help enterprises increase distribution efficiency while lowering logistic cost.

“Currently, the processing and manufacturing time of a business accounts for only less than 20% while over 80% of the time is spent on storage, handling and transportation.

“The cost of logistics and storage alone account for more than 30% of the whole supply chain’s cost.

“Inefficient logistic and storage solutions can impede growth and negatively impact a business’ long-term competitiveness,” Chuah said.

According to Chuah, the entire i-Hub system – comprising software and hardware solutions – is designed to help companies save space and increase cost efficiency, which will improve their bottom line.

“We hope to make the solution available in the market soon,” he said.

On its semiconductor test-equipment, Pentamaster expects to deliver 80 to 100 semiconductor test equipment in the second half 2019 to multinational corporations (MNCs) in China, Asia Pacific, and the US.

Group chairman CB Chuah said the group had secured orders for around 30-40 machines since March 31.

“We are now negotiating to secure orders for another 40 to 50 machines from five MNCs in the region another five projects.

“Some 40% of the orders are for MNCs in China producing for the US market.

“Because of the US-China trade war, it does not make sense for the companies the manufacture the machines and ship from China, as they will have to pay the high duties imposed on China-made products,” he said.

The new equipment, priced between US$150,000 and US$500,000, would be used for checking 3D sensors used the facial recognition features of smartphones.

Since Jan 2019, Pentamaster has also marketed new semiconductor test equipment under its own Trooper and Zeta brandnames for front-end manufacturing process, which produces transistors, integrated circuits, diodes, and capacitors.

“These new products will impact positively on our revenue this year,” he added.

According to Chuah, the shift in the global supply chain from China to South-East Asia will create opportunities for the group to expedite its expansion plans in the Greater China region.

“With our technological capabilities, we are in a very good position to capture these new opportunities that have materialised as a result of the US and China trade war,” he added.

The board does not recommend any dividend payment for the financial year ended 31 December 2018.

“We want to utilise the cash reserves for business expansion activities,” Chuah added.

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