Minho: Timber business will remain growth driver

SHAH ALAM: Timber product manufacturer-cum-property developer Minho (M) Bhd said its timber business will continue to be the growth driver for the group.
“At the moment, I think the property development (division) will remain as a smaller subset to the group. The main focus will still be the timber sector,” its executive director Ricky Yap Leong Seng told reporters after its AGM here yesterday.
Yap said, currently, its property development division contributes less than 10% to revenue, while the rest is from its timber extraction, trading, manufacturing and services and treatment segments.
The Klang-based company is primarily involved in kiln drying and chemical preservative treatment, manufacturing and exporting moulded timber and related products, trading in logs and timber products, manufacturing and distributing industrial paper bags, as well as property development.
At present, Yap said, the group exports almost 90% of its timber products to European countries including the UK, Belgium, the Netherlands and Germany, as well as the US.
Asked on its expansion plans, Yap said the group has delayed planned ventures into new markets such as the Middle East, China and India, due to the subdued economy outlook and softer oil prices.
“We also have to be very careful in dealing with these emerging countries (China and India) because their transaction systems are slightly different from their European counterparts,” he added.
Commenting on its financial performance ended Dec 31, 2016 (FY16), Yap said he expects the group to record similar results as in FY15, with demand for its timber products in Europe remaining stable.
Last year, Minho’s net profit more than doubled to RM17.43 million, from RM5.8 million a year before that, due to higher revenue attributed to better demand for its products and higher revenue from the residential development project in Meru, Klang.
Yap said the Meru project has been completed and it is in the process of obtaining the certificates of completion from the authorities.
On the outlook for 2016, Yap expects the rest of the year to be challenging given the slowdown in China, lower commodity prices and gradual tightening in monetary policy in the US, which will influence the global economic outlook.
For the first quarter ended March 31, 2016, Minho’s net profit fell 32.4% to RM7.42 million from RM10.98 million in the previous corresponding quarter, due to a drop in contribution from timber extraction.