New Hoong Fatt allots RM40m capex

KUALA LUMPUR: New Hoong Fatt Holdings Bhd (NHF), which sees higher revenue contribution from Asean markets going forward, has allocated a capital expenditure (capex) of RM40 million this year for product development and new machineries.

Its managing director Chin Jit Sin said 2014's capex is conservative after spending RM60 million in 2013.
"We've been on a steady organic growth for a number of years and the capex for new machineries and new product development is so that in the coming three to five years, we can grow the markets in Asia, particularly Asean," he told a press conference after NHF's AGM here yesterday.
The automotive replacement parts manufacturer expects revenue from Asean markets to jump to 50% in the future. Currently, 40% of its revenue are from the overseas market and of this, 25% is from Asean.
"Last year, our export market grew 10% and we're looking for more (growth). We look at Asean as the springboard to expand further to the various countries of Asean and the rest of Asia," said Chin.
NHF forsees that its overseas market segment will make greater strides in the coming years on the back of the Asean Economic Community and Asean Free Trade Area, and slowing growth in the Malaysian market which is seen as saturated.
Chin also said despite the challenging scenario in Asean, such as the political uncertainty in Thailand and the upcoming presidential elections Indonesia, NHF is still quite optimistic on the growth of the replacement market going forward.
"There are humps and bumps along the way, but once these issues are settled, we'll see better results. As the momentum of sales (picks up), and we utilise the capacity installed, we'll see margins come up again," said Chin.
NHF remains focused on its existing operations in China and Indonesia, where it sees potential.
NHF's customers are retailers, wholesalers and workshops. It produces metal products like door, hood and fender as well as plastic products like lamp, bumper and grille.
Currently, NHF's facility is running at 60% to 70% capacity following enhancements in both its metal and plastic production lines last year.
NHF has been providing automotive parts solutions to the local replacement market since 1977 and has a distribution channel of over 1,000 wholesalers and retailers throughout Malaysia. It also exports to 50 countries in Asean, Middle East, Central and South America, China, Africa and more.