On look­out for new busi­nesses

> Com­pany in strong cash po­si­tion, aims to ex­pand san­i­tary ware di­vi­sion at the same time

The Sun (Malaysia) - - SUNBIZ - BY EVA YEONG

KUALA LUMPUR: Goh Ban Huat Bhd (GBH), which has ex­ited the clay pipes man­u­fac­tur­ing busi­ness, is on the look­out for new busi­ness op­por­tu­ni­ties while ex­pand­ing its san­i­tary ware di­vi­sion.

“We are ex­plor­ing new busi­nesses. Af­ter the sale of our land, we are in a bet­ter cash po­si­tion. It may be a good op­por­tu­nity for us to look into new busi­nesses given this down­turn,” cor­po­rate and strate­gic plan­ning ad­viser Datuk An­der­son Thor Poh Seng told re­porters af­ter its AGM yes­ter­day.

He said the com­pany has been re­view­ing pro­pos­als but, so far, none have met its cri­te­ria.

“Good busi­ness is not easy to come by al­ready. Of course, it must be a busi­ness we are fa­mil­iar with, not some­thing we have to­tally no knowl­edge of but we won’t dis­count any sec­tor so long as we feel that the busi­ness is able to give good re­turns to share­hold­ers,” he said.

“The econ­omy is not very good so there may be a lot of busi­nesses or as­sets up for sale but on the flip­side, busi­ness is get­ting tougher to op­er­ate so we have to be very cau­tious in eval­u­at­ing what comes along. We are in a good po­si­tion to em­bark on that be­cause our bal­ance sheet is strong. Cur­rently we have close to about RM170 mil­lion cash,” he added.

Mean­while, the com­pany is aim­ing to grow its mar­ket share in the san­i­tary ware seg­ment by ex­pand­ing its prod­uct of­fer­ings. GBH cur­rently dis­trib­utes san­i­tary ware un­der its own brand as well as the Amer­i­can brand, Kohler.

“We are de­vel­op­ing our own GBH brand by virtue of the fact that we have al­ready en­trenched our GBH brand in re­spect of the mid­dle range. We will be com­ing out with new se­ries and re­brand­ing part of our prod­uct SKUs (stock keep­ing unit) to cater for more de­mand­ing con­sumers,” ex­ec­u­tive di­rec­tor David Lai Sze Pheng said.

He said the new prod­ucts in the pipe­line will cater to the mass mar­ket. GBH aims to main­tain its fo­cus on the mid­dle and high end mar­kets with the GBH and Kohler brands.

“The busi­ness is very frag­mented. If you look at where we are, prob­a­bly we are only about 5% of the to­tal mar­ket. There’s a lot of lo­cal man­u­fac­tur­ers as well as im­porters. It is a very frag­mented mar­ket but I think we have po­si­tioned our­selves well over the last cou­ple of years. We should be able to im­prove on our mar­ket go­ing for­ward,” he added.

Com­ment­ing on the out­look for its fi­nan­cial year end­ing March 31, 2017 (FY17), Lai said it will re­main chal­leng­ing due to the slower econ­omy, geopo­lit­i­cal sit­u­a­tion and the slow­down in the global econ­omy.

“Prop­erty is slow and our prod­uct de­pends a lot on the prop­erty mar­ket. It will hurt us but I think we will be able to hold our level in this com­pet­i­tive mar­ket. The pick up may not hap­pen as the prop­erty mar­ket is ac­tu­ally rel­a­tively de­pressed.

“How­ever, the re­tail mar­ket is ac­tu­ally there. Rather than buy­ing new houses, peo­ple are ren­o­vat­ing their houses so that is one mar­ket that we can tap into,” he said.

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