API TO DEVELOP NEW PRODUCT FOR EXPORT
Company stays bullish despite challenges, including high raw material prices
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ASIA Poly Holdings Bhd, the maker of cast acrylic sheets, will develop new heat management acrylic sheets for the export market.
Its subsidiary, Asia Poly Industrial (API) Sdn Bhd, will produce the energy-saving sheets and export them to South Korea, Japan, Australia, Brazil, the Middle East, England and India in a bid to improve revenue.
For its fiscal year 2016, API registered a 2.46 per cent growth in revenue to RM58.2 million despite global economic uncertainties.
The company achieved a net profit of RM4.12 million last year.
API executive director (industrial engineering, continuous improvement) Michael Yap is bullish about its prospects despite several challenges.
“Higher operating cost as a result of rising wages, cost of utilities, currency depreciation, volatile oil and raw material prices and competition are key concerns that may affect sales and profitability.
“However, the prospects of cast acrylic sheets are still promising. Barring unforeseen circumstances, we expect to achieve a satisfactory result for the current fiscal year.”
Yap also expects a big demand for its new heat management acrylic sheets.
“The new product is able to reduce the amount of sunlight entering a building, thus making the environment cooler.
“This will result in less electricity consumption when you use the air-conditioner,” he told NST Business.
With the continued global shortage of the main raw material, methyl methacrylate monomer (MMA), used in the production of the sheets, Yap expects further hikes in prices.
As such, the biggest challenge for API was to get a sufficient supply of MMA at a competitive price, he said.
“In addition, the uncertainties in the foreign exchange market may also affect our industry. If the US dollar becomes too strong, it will be too costly for our overseas buyers.
“Due to the persistent increase in raw material prices, our profit margin was eroded,” he said.
In 2014, the market price of MMA reached a high of US$2,200 (RM9,550) per tonne before falling to US$1,280 per tonne in March last year. The current market price of MMA was US$1,965 per tonne, said Yap.
“We absorbed part of the cost. We assure our clients of uncompromising quality and improved delivery time.
“Experienced acrylic traders are aware of the cyclical nature of the market. When the MMA price goes into a downtrend, we will also adjust the pricing downwards to stay competitive,” he added.
Asia Poly Industrial Sdn Bhd executive director (industrial engineering, continuous improvement) Michael Yap (second from left) with (from left) senior technical manager Loh Poh Ming, sales and marketing director Kua Chy Heng and finance manager Ch’ng Siew Lei.