SHAH ALAM: While companies are cutting staff, one-stop plastic solution provider HIL Industries Bhd is hiring, adding on new products and physically expanding.
From its initial plastic products, it moved into housing development during the last property run and is now making face masks.
President/chief executive officer Datuk Milton Ng said the company went into masks because the supply was so short at one point that “it pains me to buy masks at high prices to provide for my workers.”
It bought a semi-auto line to make surgical masks in June and has been operational for a month now. He is installing two fully automated lines to make women and children’s masks.
“Even if a vaccine is found, that is fine because our investment is only about RM1mil.
“We kept cost down by doing the piping and electrical works in-house. We think there may be more pandemics going forward.”
He considers the move “as a stepping stone” to move into medical-related plastic equipment.
“We can learn to manufacture according to medical guidelines and get the necessary accreditation, ” said Ng during a factory visit to his plastic-making auto plant in Shah Alam, Selangor.
He is in the process of getting the masks tested to ensure the surgical masks are suitable for hospital use in US, Asia and Europe.
They will push for sales to hospitals and export after this.
He said HIL Industries will enhance their capability to enable them to venture into medical products injection molding.
“We are now planning to modify part of our production facility to gear up for medical injection molding, ” he said.
This move into medical products will have little impact on profits in the short term but holds big long term potential. His biggest fear is another lockdown.
On June 10, Bursa Malaysia issued a four-page circular after “a surge in Covid-19 related disclosures” by companies announcing various collaborations related to among others, making of personal protective equipment (PPE), ventilators, hand sanitisers, face masks, distribution of Covid-19 rapid diagnostic test kits or to develop or distribute health supplements.
“To say that we are going into a completely new sector is not exactly true. The materials for masks are similar to the materials we are using currently, ” Ng said.
HIL Industries, according to its 2019 annual report, started out about 40 years ago in the plastic injection industries. Its operations started in 1969 as Hagemeyer Industries (M) Sdn Bhd, a Dutch company involved in the making and trading of BIC ball pens.
Following a management buyout, it became HIL Industries Sdn Bhd. It was listed a few years later.
Besides being a one-stop plastic solution provider, it was also involved in electronics and IT parts for mobile phones and computers. When multinational companies like Dell and Motorola left Malaysia for other parts of Asia 15 years ago, HIL knew it would lose a significant part of its business.
So it took a gamble and followed Dell to China. Its Suzhou plant is involved in electronic and IT parts producing for Dell and Taiwanese brands. The company subsequently shifted greater focus to automotive parts, which started back in the 1980s, in its Malaysian plants.
“So far, we have been doing very well for auto, ” he said.
Its Malaysian operations involve mostly auto parts for local and foreign cars. They also export to Honda Thailand and Honda Japan. He will be expanding to an adjacent building to house some 2,800 tonnes of machinery. “We have sufficient orders so we need to expand, ” he said.
Ng said the company, under his father, executive chairman Tan Sri Ng Boon Thong @ Ng Thian Hock, ventured into property development in order to “diversity earnings and to enable further growth for our company.” The property business offers a much higher margin than manufacturing, the younger Ng said.
“I don’t have an office in this location. So the interview will be done at the reception area. We are very lean here.”
“Manufacturing is very cost-sensitive so every little bit of margin counts, ” he added.
The family holds close to 75% of the company equity. Property companies Amverton Bhd and Chin Hin Group Property Bhd were taken private earlier this year.
Despite the slow market, he remains bullish about the sector. Sales went up after the MCO was relaxed a bit. Most of projects involve landed units although there are 280 units of condominium in Bukit Kemuning have been sold.
According to its 2019 annual report, the group recorded revenue of RM154.84mil and net profit of RM21.47mil, versus RM106.51mil and RM17.08mil, respectively, a year ago. The group’s borrowing’s are solely for finance leases and overdrafts. Total borrowings decreased from RM747,000 from Dec 31,2018 to RM389,000 as at Dec 31,2019. It has cash of about RM80mil.
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