Seacera may venture into manufacturing, medical-related business

BATU CAVES: Seacera Group Bhd is looking to venture into a new business, which is likely to overtake the tile segment as the largest revenue contributor for the group, according to managing director Zulkarnin Ariffin.
"There are some M&As (mergers and acquisitions) for the diversification. We're looking at new things which can give value creation," he told SunBiz in a recent interview.
Describing the new business as less competitive with a promise of high margins, he opined that it could even bring in more than the tile business, which makes up 60% of the group's top line currently. The construction business contributes the remaining 40%.
"There are a few projects that we're in discussions for, and we hope we can convince the shareholders what we're proposing is the right one. Talks are on-going, we hope we can finalise it as soon as possible," he said.
While Seacera ventured into the construction business in 2014 following the disposal of its plastic packaging business, Zulkarnin said the group still needs "another big business" to fill the gap. He declined to disclose further details.

Sources say the new business will be in the manufacturing and/or medical industry.
Seacera's share price has soared 77% over the past one month. Last Friday, the counter closed up 12 sen or 10.43% at RM1.27, on 6.06 million shares done.
For the tile business, Zulkarnin said the group is targeting to expand its presence abroad on the back of the weakening of the ringgit, which has worked to the benefit of exporters.
"In 2016, we are looking to increase our exports from 30% to 40%," he added.
Seacera's major export markets include Australia, Singapore, Brunei, the Middle East, Africa, India and Pakistan. Going forward, it is looking to expand its presence in Africa and to tap into Latin America.
Locally, Zulkarnin expects continued demand for tile products in 2016, given the government's commitment to construction projects, especially affordable housing in the country.
"We've managed to get a few contracts (to supply tiles for affordable housing projects), the latest one is a RM2 million order from UEM for their affordable housing project in Johor," he said.
Spanning 33 acres, Seacera's new plant in Kamunting, Perak, is expected to begin operations by year-end or early next year, after construction work starts within the next two to three months.
The construction cost and equipment installation for the plant is about RM70 million. Upon completion, it will have a production capacity of 4 million square metres of tiles compared with the current 2 million square metres.
"We hope that by 2017, the economy will recover and we can benefit from that," Zulkarnin said.
He believes the group, which lost its bid to construct Permodalan Nasional Bhd's Warisan Merdeka in October 2015, will be able to win some jobs in the first half of this year to sustain its construction order book, which currently stands at RM160 million.
Zulkarnin said the group is bidding for highway projects and private and government buildings.
Even though Seacera has no on-going property project at the moment, Zulkarnin said, it is preparing to leverage on the next property cycle, through upcoming projects in Sungai Long and Malacca.
For the nine months ended Sept 30, 2015, Seacera saw its net profit surge more than 23-fold to RM296.61 million compared with RM12.87 million in the same period last year, mainly due to a revaluation surplus of RM289.0 million.
Last Friday, the group said in a filing with the stock exchange that it has proposed to undertake a private placement of up to 18.93 million shares, to raise up to RM18.93 million based on an issue price of RM1.00 per share.
Proceeds from the private placement will be used to fund its property and construction activities.