Manufacturer looking at new business strategies to grow new product segments
VEHICLES in the country can look forward to using number plates that come with security features in the near future.
That is an innovation which Penang-based name plate manufacturer Volcano Name Plate Sdn Bhd is planning to introduce to the local and regional market with the help of its European partner.
“Vehicle number plates with QR Code, hologram, UV prints or radio frequency identification (RFID) chips are very popular in Europe as these innovative security features protect the vehicle plates against falsification.
“The RFID chip, for example, allows the number plates to be tracked when they are stolen,” shares Volcano managing director Nelson Ch’ng.
Ch’ng says the company is currently looking into an appropriate business strategy to grow this new segment.
“We will need to inject about RM30mil for a fully automated production line to produce the new number plates,” he says.
The company has already carried out market research and has found that there is indeed a huge potential market in Malaysia, and Asia at large, for the new product.
Ch’ng hopes to also ride on the growing local automotive industry to grow the new number plate market.
Done right, the company can expect revenue growth to double from this new business alone.
According to the Road Transport Department, the number of vehicle registrations in Malaysia average about 1.2 million per annum.
“In August 2016, just for that one month alone, the number of car registrations increased substantially to 99,589 from 77,655 in July 2016.
“Given the rapid growth of car registrations, it is important to install plates with security features to prevent counterfeit registrations,” he says.
The company’s innovative streak was recognised when it won the Platinum award for best innovation in the above RM25mil revenue category at the Star Outstanding Business Awards 2016.
The award was a testament to how the company has grown from its humble roots into an innovative manufacturer.
Volcano, one of the pioneers in the name plate industry in Asia, has established itself as a leading aluminium name plate manufacturer in the country.
It started as a small scale manufacturer, operating from a shophouse in Butterworth, Penang in 1999 with only five workers.
Capital outlay for Volcano then was a modest RM100,000.
“Our big break happened in 2004 when we secured business from international brandnames to supply them with name plates,” says research and development director GS Yeap.
Volcano moved to its current location in Prai that same year to accommodate its growth.
It manufactured name plates bearing logos for international brandnames such as Hewlett-Packard, Electrolux, Fisher & Paykel, Agilent, Honda and Canon.
“Our customers are based around the globe,” Ch’ng says.
The company also ventured into the manufacturing of plastic parts for injection moulding and sub-assembly services, which enabled them to expand the company’s product range from name plates to custom panels, injection moulding, plastic surface designs and electronic input devices such as rubber keypads, membrane switches and touchscreens.
In 2008, it set up a production facility in Rayong, Thailand, to produce name plates and plastic injection moulding parts for consumer goods.
It also established an engraving company to provide more solutions for its clients.
The group also has a plant in Selangor and currently employs about 500 workers.
To meet customers’ demands and to keep production cost low, Volcano is constantly upgrading and improving its production processes. Yeap says the group spends about 5% of its revenue for research and development activities.
“We have put in place a stringent quality control system to ensure that our products are of high quality and are delivered on time to our customers.
“To maintain our competitive edge in the market, Volcano has an experienced team of professionals who work closely with customers to fulfil their demands and ensure that their products fit into the targeted market,” Yeap says.
Volcano is known for its capabilities as a total solutions centre for its customers and for providing competitively priced products and services.
Volcano is also planning to start the production of green name cards soon.
“These green name cards will have QR codes that allow the contact details to be stored in smart devices when scanned.
“These cards will help companies to save cost on printing paper-based name cards to protect the environment,” says Ch’ng.
Volcano will also expand its laser fibre machine production line.
“We invested RM3mil last year to install laser fibre machines to produce high quality name plates.
“The investment helped to save the company a substantial amount on labour, which was required to operate metal stamping machine to cut the name plates.
“This year we will invest another RM4mil to further reduce the labour content in the production of name plates. We are aiming to save about 40% on labour cost with the laser fibre machines,” he adds.
Volcano is targeting a RM80mil revenue for 2017, compared with about RM65mil in 2016.