ICP: Second China op to boost earnings
|
|
INDUSTRIAL Concrete Products Bhd (ICP) expects its second China operation, targeted to be up and running by the end of this year, to significantly boost its future earnings, chief executive officer and managing director Mah Teck Oon said.
“The factory in China, with the capacity to produce 240,000 tonnes of concrete piles annually, is expected to start operating by November this year,'' he told reporters after the group's EGM in Petaling Jaya yesterday.
He declined to disclose when the new plant was expected to hit maximum production capacity, but said given the robust growth in China's port infrastructure construction activities – estimated at around 33% annually – demand for the more economical concrete piles would be high.
“Our focus will be on higher margin products like the pre-tensioned spun concrete piles,'' Mah said.
ICP's spun concrete piles are used in the construction of power stations, high-rise buildings, bridges and harbours. The group dominates the local market with a 70% share in the concrete piling segment.
Mah said ICP planned to invest around RM30mil for a 73% stake in a joint venture company producing specialised concrete piles used mainly for piling works in marine infrastructure works.
Its joint venture partner is a leading port contractor – China Harbours Engineering Co.
The group's first concrete pile manufacturing facility abroad in Guangdong, China, is part of ICP's strategy to boost export income. Currently, overseas business contributed about 20% of ICP's annual revenue.
“The China joint venture project will boost ICP's manufacturing capacity by a fifth, from 1.2 million tonnes per annum,'' Mah said.
Apart from China, ICP is also looking at the Middle East and India as new markets for its products.
Mah said the group had secured contracts worth more than RM45mil to supply spun concrete piles to port projects in Iran, Yemen and Bangladesh.
“Our order book stands at a healthy RM85mil. While the local market remains as our biggest income contributor, we are focusing on penetrating new markets elsewhere in the region,'' he said.
One of the new markets is India, where parent company IJM Corp Bhd is already an established player in highway construction, toll concessions and property development.
ICP is expected to announce its full-year results ended March 31, 2005 over the next few days. The group had recently changed its fiscal year-end to March 31 from June 30 previously. The results to be announced would reflect its performance over the past nine months.
For the first six months ended Dec 31, 2004, it reported a sharp improvement as net profit rose more than 100% to RM18.9mil from RM9.4mil previously.
“We expect another good year ahead,'' Mah said.
At the EGM yesterday, shareholders approved plans for a 1-for-5 bonus issue and a share split of 1-into-2 shares. The corporate exercises were to be implemented by the end of next month.
ICP : [Stock Watch] [News]
| More @ The Star Online: |