Chin Well sees rising domestic demand for its fasteners
Resource from: The Star Online Likes:208
Sep 29,2015
GEORGE TOWN: Chin Well Holdings Bhd sees domestic demand for its construction grade fasteners growing as a result of the weakened ringgit.
Group executive director Tsai Chia-ling told StarBiz the hardware wholesalers in the country used to order from China.
“But with the weakened ringgit, it has become more expensive for them to order from overseas.
“They have turned to us for their supplies.
“As we are in the country, our customers can also be ensured of timely delivery,” she said. Tsai said the problem with the domestic demand was that a lot of the housing projects in Penang had come to a standstill.
“These projects are not able to kick off because they have not been able to get the advertising permit and developers’ license,” she said.
The group is also seeing growth in the orders for its fencing products, The order book for the fencing materials is filled up till year end,” she said.
The domestic contribution to the group is expected to grow to 30% for the 2016 fiscal year from about 22%.
On its do-it-yourself (DIY) products, Tsai said the group had just added new lines to produce a variety of DIY fasteners.
In Vietnam, the group is producing now 3,500 tonnes of fasteners monthly compared to 3,800 tonnes due to the global slowdown in the industrial sector.
“We can expect the DIY segment to contribute 20% to the group’s turnover for this 2016 fiscal year ending next June 30.
“The DIY contribution has steadily risen from 10% in 2014 to 15% in 2015,” she said.
Overall the market from Europe has slowed, according to Tsai. “In 2015, the contribution from Europe is about 56%. This year we expect the contribution to fall to 50%.
“However, the turnover should increase as a result of the foreign exchange,” she said.
Some 45%-50% of its raw materials are imported, while most of its earnings are in European and US currencies.
The San Francisco-based Grand View Research projects that the global industrial fastener market would top the US$104bil mark by 2020.
The report notes that economic growth and industrialisation in the United States, China, Brazil, Russia, Poland, and India continue to grow the construction industry, which will further drive demand for fasteners.
(The Star Online)
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