New Hoong Fatt to drive further into S America

KUALA LUMPUR: Automotive replacement parts manufacturer New Hoong Fatt Holdings Bhd has set its sights on further expanding into the South America market over the next two years, said managing director Chin Jit Sin.
Speaking to reporters after the company's AGM, he said this is part of the company's strategy to increase overseas contribution, which stood at 43% last year.
"We started off with quite a small percentage in South America. This two years, we will concentrate on growing the South America market," noted executive chairman Kam Foong Keng.
Currently, the Central and South America market makes up 20% of total export revenue.
New Hoong Fatt, which is exporting to over 50 countries, has set a target for overseas markets to contribute 70% to its topline by 2020. Of that, Asean, as the company's key growth region, is expected to contribute 30%, while the remainder 40% will come from other regions.
Chin said the local operating environment is getting more competitive with the influx of automotive replacement parts from Thailand and China
"That's why we've moved the concentration from the local market to much bigger market – we're looking at Asean and outside Asean," he added.
The company has an extensive distribution channel of more than 1,000 wholesalers and retailers throughout Malaysia.
When asked of plans to diversify the business, Chin said the company is always on the lookout for new income stream, "but nothing is on the table" for the time being.
He noted that 2015 is a challenging year for New Hoong Fatt due to a slowdown in the global economy, but it still hopes to register double-digit sales growth this year.
Profit-wise, Chin expects the company to perform better this year, taking cue from its stellar results in the first quarter, which saw a 76.21% jump in net profit to RM4.37 million.
Last year, New Hoong Fatt's net earnings declined 40.6% to 12.0 million from 20.2 million, mainly due to unfavourable product mix as well as higher manufacturing and operating costs.
Meanwhile, the company has allocated RM20 million for capital expenditure (capex) this year, mainly for the design and manufacture of new automotive parts. Last year's capex was at RM60 million.
Its plant in Klang is running at a utilisation rate of 60% to 70%, which is deemed as a comfortable level.