Company Notes 2018.03.09

Pentamaster targets two sectors

“The powertrain system of automobiles is generating the demand for semiconductor test equipment. The improvements in advanced safety, convenience and comfort systems are the other factors driving the growth of the semiconductor content in automobiles. The Asia-Oceania region has the most market share of vehicle production and sales due to the growth of the Chinese automotive market. We are spending RM45mil on two manufacturing facilities this year. About RM35mil is for the Batu Kawan facility that would also produce IARM solutions on top of test equipment for the medical equipment and automotive industries. The remaining RM10mil is for the extension of our current plant in Bayan Lepas that would serve as a research and development centre and warehouse.”


Infrastructure jobs, exports set to lift Eita’s growth

“Part of the reason for this is that the MRT1 (Klang Valley mass rapid transit’s Sungai Buloh-Kajang line) project was completed last year. We’ve just got (contracts for) the MRT2 (Sungai Buloh-Serdang-Putrajaya line) but we think contributions will only come in for FY19.”

“We still aim to achieve 50% of the total revenue in our export markets but it depends on some of the projects that we are getting as the infrastructure projects could be lumpy. What’s more important is the growth seen in the export numbers over the last few years.”

In the longer term, Eita sees the lift and escalator maintenance services as an important segment. Currently, the group does maintenance work for over 90% of the lifts and escalators supplied, and the job only contributes about RM20 million or less than 10% of Eita’s topline.


PIE seeks to penetrate medical, auto, aerospace sectors

“We try not to be in the 3C industry — consumer electronic, communication such as smartphones, and computer because these are high-volume products with short life cycles. We cannot cope with that [type of business]. On the other hand, models for barcode scanners [of which PIE does testing under its contract EMS segment] do not change much. The volume is also not high, but they command a reasonably good profit margin — higher than the 3C products.”

Some 98% of PIE’s revenue comes from manufacturing, which consists of contract EMS for box-build, semi box-build and barcode scanners, raw wire and cable, and cable assembly and wire harness. The remaining 2% is from its trading segment.

“More workers would be needed when more orders come in later this year, but I will think about it then. Labour shortage is a constant problem, but for now I have managed to overcome the severe shortage. Also, because we increased the capacity at our Thailand plant, we hope to circumvent labour issues in Malaysia because there is no worker shortage problem there. As for raw material shortage, the impact is not so great now because the situation has recovered slightly.”


Top Glove wants to trim dependency on foreign workers

The world’s largest glove maker aims to reduce the ratio of foreign workers to locals to 50%, from 75% presently, over the medium term, according to Top Glove information technology general manager Chee Yih Tzuen. “Our total workforce is about 14,000 currently and the industry is competitive, so we have to do it (cut foreign workers) immediately,” he said on the sideline during the group’s factory tour yesterday.

Top Glove managing director Datuk Lee Kim Meow said labour traditionally constitutes about 10% of the group’s cost of production.

Asia’s online shopping boom is making it harder to track inflation

Malaysia’s statistics department estimates 87% of Malaysians use internet daily; 80% of those users seek information on goods, services.

“Big data” initiative created to explore online pricing and inflation.

Statistics department also now has unit dedicated to compiling indicators to measure e-commerce.


Malaysia disagrees with IMF over currency management, once again

“We continue to have strong concern on the Fund’s inflexibility to be receptive and open to new approaches and policy instruments needed to maintain stability and promote financial market development,” Juda Agung, an IMF executive director representing Malaysia along with other Southeast Asian countries, said in the report. Our authorities are also deeply concerned with staff’s lack of understanding of the domestic context which can diminish the Fund’s role as trusted adviser.”

Malaysia has a well-documented history of turning down the fund’s assistance during the 1997 crisis. The government implemented capital controls at the time, which were first panned, but much later acknowledged by IMF officials as being ahead of the curve.

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.