Plastic precision moulding manufacturer, LCTH Corp Bhd, is ready to embark on a regional expansion with plans to set up manufacturing plants in countries like Vietnam, Thailand, Indonesia and India.
Managing director Elson Hew Lien Lee described the company’s plan to expand regionally as timely after having secured a strong market presence in Malaysia for the past 13 years.
“It is like a cycle, LCTH started its business in Malaysia in 1993, from Singapore, due to the low cost of production here. “Maybe the next two or three years down the road, we may have a manufacturing site in Vietnam or other countries where the cost is even cheaper,” Lee said. He said: “This is the trend that we foresee. Depending on the situation, we may expand sooner as we have adequate funds.”
LCTH’s substantial shareholder is Singapore-based Fu Yu Investment Pte Ltd (FYI), which in turn is a wholly owned subsidiary of Singapore based Fu Yu Corp Ltd (FYC) -one of Asia’s largest suppliers of high precision injection moulds and plastic injection moulded parts.
FYC, to date, has 10 manufacturing plants in Malaysia, China and Singapore.
According to Hew, LCTH’s mission is to be a world-class player in the region and be able to survive in the increasingly challenging global market.
“We believe the company can truly test its leadership in these countries where we plan to locate our new manufacturing plants,” he added.
For financial year ending December 31, the company’s net profit is expected to surge to RM65.3mil from RM46.8mil in the previous financial year.
The company’s revenue is expected to increase to RM288.6mil from RM237.1million (US$16.5 million) previously.
Based on last year’s net profit of RM46.8mil and a market capitalisation of RM648mil (based on issue price of RM1.08), Hew said LCTH is set to be one of the largest plastic moulding companies to be listed on Bursa Malaysia.
He said: “Currently, there are at least 500 plastic injection moulding companies in Malaysia but the industry is fragmented with many areas of specialisation.”
The plastic injection-moulding sector is the largest segment of the plastic industry with a market size of RM3.8bil out of the sales value of plastics of RM8.8bil in 2003.