Property division to underpin Amalgamated Industrial Steel turnaround

SHAH ALAM: Amalgamated Industrial Steel Bhd (AISB) aims to be profitable this financial year ending Dec 31, 2016 (FY16), with the property division expected to contribute half of the group's revenue.
AISB's property development division was established last year following its diversification into the sector to broaden its revenue.
"We've started implementing our maiden project, Avant Industrial Park, in Shah Alam upon approval of the development order in April 2016," executive director Lim Yew Boon told a press conference after AISB's AGM here yesterday.
Avant Industrial Park has a gross development value of RM160 million. It covers 12 three-storey semi-detached factories in the first phase (for sale at RM8 million-RM8.5 million per factory) and two custom-built bungalow factories in the second phase.
"Pending on the sales outcome towards the end of 2016, we're confident (on this project). Property development will exceed the steel business (going forward)," said Lim.
AISB saw a net loss of RM6.5 million in FY15 amid price cuts by Chinese mills that left global steelmakers reeling. The market also operated on a hand-to-mouth basis, with customers buying what was immediately required and at as short a lead time as possible.
Lim said AISB plans to trade in various steel-related products. This strategy is in line with the future growth of the property development division, of which the trading team will lend support as procurement centre for the sourcing and supply of construction items required in future development projects.
AISB will also explore into providing contract manufacturing services.
"We'll continue with our steel business and we're careful looking at all the various aspects. We keep our inventory to a minimum to cushion the impact," Lim said.
Meanwhile, AISB is exploring proposals for upcoming property projects and is actively looking at land for development in the Klang Valley.