Business

Friday June 8, 2007

HeveaBoard to save by using biomass energy



KUALA LUMPUR: Particleboard maker HeveaBoard Bhd expects to save some RM12mil a year on fuel as its second plant utilises biomass energy instead of fossil fuel, said group managing director Tenson Yoong Tein Seng.

This would help improve operating margins, he said after the company AGM on Friday.

HeveaBoard, which commissioned the second plant last October, expects capacity utilisation to reach 70% by end of this year.

Yoong said the company was in discussion with customers to adjust the pricing given the significant appreciation of the ringgit against the US dollar.

About 80% of sales are in US dollar denomination.

For year ended Dec 31, 2006 (FY06), earnings were eroded despite the company posting better sales.

Last year, net profit fell to RM7.76mil from RM9.05mil in FY05 while revenue rose to RM163.1mil against RM147.7mil previously.

For the current financial year, currency risk remained a challenge, Yoong said, adding that the company was in discussion with buyers on pricing adjustments.

The good news was HeveaBoard's financing for its second plant was US dollar-denominated, hence there would be savings at the point of repayment, he said.

Furthermore, prices of raw materials such as rubber wood and glue had tapered off from its peak, he added.


HEVEA : [Stock Watch] [News]
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HEVEA-WA : [Stock Watch]

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