Business

Thursday March 5, 2009

Dufu diversifies into telecom parts

By DAVID TAN


Firm to reduce reliance on hard disk drive sector

GEORGE TOWN: Dufu Technology Corp Bhd is targeting to reduce its dependency on the hard disk drive component business over the next two years.

It was now diversifying into the manufacturing of casings for telecommunication equipment used in supporting WiMAX infrastructure, chief executive officer Yong Poh Yow told StarBiz.

“We are now making such casings for a multinational corporation based in Malaysia.

“We are also in talks to provide similar manufacturing services for customers in Asia, the US and Europe,” Yong said, adding that Asian market for such casings was bigger than that in the US.

Another business Dufu expects to grow is its industrial sensor products, which it ventured into three years ago and contributed about 13% to revenue for the year ended Dec 31 (FY08).

“This is a growing market in the mining and oil drilling sectors, as industrial sensors are used to detect the presence of toxic chemicals and gas.

“Industrial sensors are also being used now in underground carparks to detect the level of carbon monoxide,” Yong said.

He said Dufu’s core business of manufacturing clamps and spacers for hard disk drives currently generated 75% of group revenue.

By 2011, revenue contribution from this segment was expected to shrink to 50% and the two new businesses accounting for the other 50%, he said.

Yong said due to the global economic crisis, the group expected a decline in its performance for the first quarter ending March compared with the previous corresponding quarter.

Late last year, Dufu invested about 20 million renminbi in a plant in Guangzhou, China, to produce hard disk drive components, air conditioner compressors, and electronic connectors for the local Chinese market.

For the fourth quarter ended Dec 31, Dufu reported a 16% drop in pre-tax profit to RM2.28mil despite a 10% growth in revenue to RM27.35mil against RM2.72mil and RM24.81mil respectively in the previous corresponding period.

For FY08, its pre-tax profit dropped 18% to RM10.51mil on higher revenue of RM121.38mil compared with RM12.72mil and RM109.51mil respectively in FY07.

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