KTC ex­pects strong rev­enue growth in FY17

The Sun (Malaysia) - - SUNBIZ - BY WAN ILAIKA MOHD ZAKARIA

KUALA LUMPUR: Sabah-based con­sumer pack­aged goods dis­trib­u­tor Kim Teck Cheong Con­sol­i­dated Bhd (KTC) said it ex­pects a strong dou­ble-digit rev­enue growth for the fi­nan­cial year end­ing June 30, 2017 (FY17), with its newly se­cured dis­tri­bu­tion con­tracts from SCGM Bhd (SCGM), Anakku Sdn Bhd (Anakku), Marigold and Proc­ter & Gam­ble (Malaysia) Sdn Bhd (P&G).

“Af­ter the IPO (ini­tial pub­lic of­fer­ing), we have suc­cess­fully built up our in­fra­struc­ture.

To date, we have 7,087 dis­tri­bu­tion points, where we have pen­e­trated into 84 dis­tricts in East Malaysia, with 21 dis­tri­bu­tion cen­tres,” its ex­ec­u­tive di­rec­tor Dex­ter Lau told re­porters af­ter its 2nd AGM here yes­ter­day.

“We are also in talks with a num­ber of brand own­ers for the pos­si­ble busi­ness av­enues and to en­sure that we con­tinue to build our brand port­fo­lio,” he added.

For FY16, the group recorded a net profit of RM1.9 mil­lion, with a rev­enue of RM341.16 mil­lion.

Lau said the dis­tri­bu­tion of third-party brands con­trib­utes 90% to the group’s rev­enue and in-house brands the rest.

Other third-party brands that KTC dis­trib­utes in­clude Coca-Cola, Lo­real, Philips and Panadol, while its in-house brands namely Orie, Bam­ble and Creamos man­u­fac­tures and dis­trib­utes frozen and dry goods, as well as bak­ery prod­ucts across East Malaysia.

Mean­while, Lau said the eco­nomic slow­down is un­likely to af­fect the group’s busi­ness, as it dis­trib­utes brands that com­prise ne­ces­sity prod­ucts, such as per­sonal care, food and bev­er­ages, as well as house­hold items.“In terms of con­sumer mar­ket, of course we are ex­pe­ri­enc­ing a bit from the eco­nomic slow­down. But so far we are ex­pe­ri­enc­ing a very min­i­mal im­pact to the busi­ness, as con­sumers still pre­fer Malaysia’s brands and lo­cal prod­ucts,” he said.

Asked about the im­pact from the weak­en­ing ring­git, Lau said the group is not much im­pacted, as its busi­ness in­volves min­i­mal trans­ac­tions in for­eign cur­ren­cies.

Com­ment­ing on its ex­pan­sion plans, Lau said the group is con­tin­u­ously look­ing for more ac­qui­si­tions go­ing for­ward, not­ing he is eye­ing for a lo­cal or for­eign com­pany that has a syn­er­gis­tic en­vi­ron­ment. “We will not stop look­ing for more ac­qui­si­tions and at­trac­tive deals to help us strengthen our core busi­ness in the con­sumer in­dus­try. If the op­por­tu­nity arises, we will def­i­nitely con­sider it,” he added.

Early this year, KTC made its maiden ven­ture into the over­seas mar­ket by ac­quir­ing a 60% stake in Brunei dis­tri­bu­tion out­fit Grand­top Mar­ket­ing Sdn Bhd (GMSB) for RM1.79 mil­lion.

“With Brunei com­ing in, we will in­crease an­other 600 dis­tri­bu­tion points. So that takes it up to 7,687 dis­tri­bu­tion points,” Lau said, not­ing the ac­qui­si­tion will be com­pleted by the first half of next year.

From left: Kim Teck Cheong man­ag­ing di­rec­tor Datuk Lau Koh Sing, non-ex­ec­u­tive chair­man Datuk Deleon Quadra and Dex­ter Lau at the brief­ing in Kuala Lumpur yes­ter­day.

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