PETALING JAYA: Techbond Group Bhd is in good stead as the company gradually ramps up production to spur its revenue growth from the overseas market amid the Covid-19 outbreak.
Based on its latest annual report, overseas sales currently accounts for more than 75% of Techbond’s total revenue and Vietnam was the largest market.
At the same time, the industrial adhesives and sealants manufacturer has a strong balance sheet with a net cash position to ride out the pandemic as it remains focused to execute its growth plans.
Deputy managing director Lee Seh Meng (pic) told StarBiz that the group’s overseas sales have remained strong so far amid the pandemic.
Apart from expanding our presence in the industries that it is serving, he said it also plans to expand its geographical presence.
Currently, its products are distributed to more than 15 countries, hence, there are many more countries he said which it can explore.
“Meanwhile, our R&D team is kept busy developing new products for both our existing and potential new markets.
“We also collaborate with government agencies such as Malaysian Palm Oil Board to explore the development of new innovative adhesive products.
“As the Covid-19 pandemic is still very fluid, we are still assessing its impact on the group. But what we can share is that our overseas sales remain solid as orders are still coming in.
“Some of our local customers have resumed their production and orders are coming in gradually, ” he noted in an email.
Besides its dedicated research and development plant in Shah Alam, the group has a new upstream polymerisation plant upcoming in Vietnam. The latter’s operations have been delayed due to the Covid-19 outbreak.
Commenting on its Vietnam plant, Lee said: “The commencement date has been pushed back currently.
“Construction has been completed already, it’s just pending handover procedures.
“The handover requires our Malaysia R&D team to fly over to run tests to confirm the quality and the finish.
“However, we are unable to travel at this moment due to the travel restrictions.”
As for the outlook of Techbond’s business this year, Lee said he remains positive, adding that its growth plans are still progressing and views Covid-19 as just a short-term headwind for the group.
As for its strategy, Lee said it is to further expand in the industries that the group is strong in ie woodworking and paper and packaging.
This, he added would provide an added advantage for Techbond, noting that a key differentiating factor from its peers is the commitment and continuous investment in R&D activities.
The group has a solid balance sheet with a net cash position.
“Our net cash per share stood at 26 sen per share as at Dec 31,2019. Moreover, cash flow would not be an issue for us as we have been generating positive net operating cash flow every year since 2015.
“All in all, we are confident to navigate through uncertain times ahead and we remain optimistic on our long-term prospects, ” he noted.
Techbond’s first half net profit rose 45.3% year-on-year to RM5.7mill on the back of RM40.2mil in revenue during the period.
Techbond, Lee said, has adopted a formal dividend policy of distributing up to 30% of its profit after tax and non-controlling interest. This is part of our efforts to continue rewarding our loyal shareholders, ” he said.