Challenging time for automotive and plantation business

SHAH ALAM: Delloyd Ventures Bhd, which received approval from shareholders for its privatization plan, sees challenging time for its two core businesses, namely automotive and plantation segments, due to current market condition going forward.
"We think that the market going forward will be very challenging. In fact, if we look at the market right now and also looking into our past (financial) results, for the last couple of years, the performance has been on the drop," its deputy group managing director Datuk Leon Tee Wee Leng told reporters after the group's EGM yesterday.
He said the company's automotive parts and components business is facing risks due to the reduction in the market share, as the national cars are less now compared to the imported cars.
He also noted that the bulk of its business is with the national cars or the locally assembled cars.
"If you look at the conditions right now, we have more imported cars in Malaysia. Therefore, the growth of cars being built in Malaysia is less now compared to previous year," said Leon, who noted the drop in its financial results is one of the rationale to take the company private.
"The plantation sector for us going ahead is also very challenging, the bulk of our plantation is in Indonesia and we have been subjected to a lot of risk, for example forex risk, where the Indonesian rupiah also has been on the drop. In fact, last year we have suffered a lot from forex loss, due to the fluctuation of currencies."
"The market conditions are not doing quite well now, it is a very volatile market at the moment, so we think that the performance of the company will be under pressure going forward," he said, adding that some 96% of its shareholders voted for the company's privatization exercise which will see shareholders getting RM5.15 sen per share.
Meanwhile, Leon said its privatization exercise might be completed by end of March 2015, following with the company's de-listing from the Main Market of Bursa Securities on April.
Commenting on whether the company will float back to the stock exchange in the future, he said the company has no plan to do so at the moment.