Chin Well to make Vietnam focal point for fastener ops
BUKIT MERTAJAM: Vietnam will play a key role in Chin Well Holdings Bhd’s plans to grow its fastener business.
Group executive director Tsai Chia-ling told StarBiz that Vietnam is where the group would focus its resources as the country offered cheap labour who could be trained cost effectively,” she said.
Tsai said the group is now planning for its Vietnam operations to produce more do-it-yourself (DIY) and other types of fasteners.
“In July, the Vietnam facility will start to manufacture a new range of fasteners for South-East Asian market.
“These new fasteners will be used to connect reinforced concrete bars used in high- rise buildings,” he said.
According to Tsai, the group will also raise the production volume of DIY fasteners at its Vietnam plant in the third quarter.
He said it is talking to a big DIY customer in the United States who could take up about 15% of the group’s annual output of fasteners in Vietnam.
“We have plans to tap into the European market with our DIY fasteners. Currently, the Vietnam facility produces about 60,000 tonnes of fasteners per year.
“We foresee the operations in Vietnam to contribute about 50% to Chin Well revenue in two years, compared to 30%-40% now,” she added.
Moving on, the group expects to perform better in the financial year ending June 30, 2018 compared with the previous year.
“This is due to the higher prices of hot- rolled coil, which hovers between US$650 and US$750 per tonne now, compared to US$500-$600 per tonne a year ago,” she said.
Tsai also said that orders from European construction companies had slowed down due to the winter season.
“We can expect orders to come in next month. Europe’s contribution should exceed 50% for financial year 2019, compared to about 45% now,” she added.
The group is forecasting an output of 140,000 tonnes for the financial year ending June 30, 2018.
According to the Global DIY Summit 2018 website, about 86% of the DIY market is in North America and Europe combined, although their joint population accounts for only 23 % of the world population.
The DIY markets of these two continents € totals 463bil.
Tsai: We have plans to tap into the European market with our DIY fasteners.