Business

Monday March 3, 2008

Pantech’s first overseas plant

By YVONNE TAN



PANTECH Group Holdings Bhd is targeting to set up its first overseas manufacturing plant in Vietnam this year in an effort to capture more sales.

Executive director Adrian Tan said this was in line with the group's target to grow revenue by at least 10% for the financial year ending Feb 28, 2009 (FY09).

“We want to be conservative and start small there, so the first phase of the plant should cost some US$3mil to US$4mil,” he told StarBiz after the company EGM recently.

In January, the company signed a memorandum of understanding with Vietnam-based Petroleum Technical Services Corp (PTSC), which would involve the parties using their experience and knowledge to identify potential opportunities for Pantech’s products and services in Vietnam and vice-versa.

“It is still too early to say the size of our Vietnam factory. Eventually, however, it should be as big as our Klang factory,” Tan said. Pantech's sole factory is located in Klang where production capacity stands at 12,000 tonnes per year.

With new products coming on stream later this year, the production capacity was expected to increase to 16,500 tonnes, he said.

“We are optimistic on our financial performance going forward, given the firm oil prices and our various expansion plans,” Tan added.

Pantech supplies pipes, fittings and flow control products for the oil and gas industry as well as the energy, refinery, petrochemical and chemical, and palm oil and biodiesel industries.

On new contracts, Tan said the firm secured new and recurring orders of various sizes on an almost daily basis.

“We are expecting orders from various sectors this year. With oil and gas activities expected to intensify thanks to the commodity's firm price, we are targeting major orders from the sector this year,” he said.

The company already had orders in hand worth about RM140mil at present, Tan said, of which RM80mil alone were from the oil and gas sector.

The rise in the price of steel, its main raw material, remained a challenge but the company would mitigate this by passing on the cost to its customers, he said.

Currently, overseas sales contribute 20% to overall revenue. Tan said the company was targeting to increase this to 25% in FY09, given that it had ventured into new markets such as India and the Middle East last year and had plans for more global forays in the near future.

For the nine months ended Nov 30, 2007, Pantech made a net profit of RM25.9mil against RM20.7mil in the same period in 2006.

 
PANTECH :  [Stock Watch]  [News]

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