UCI RESOURCES UPBEAT ABOUT 2021 GROWTH
Govt stimulus packages seen spurring construction projects that will drive demand for precast concrete products
UCI Resources Bhd, which made its debut on the Leading Entrepreneur Accelerator Platform (LEAP) Market on Tuesday, is upbeat about demand and growth for precast concrete products.
The industry is expected to grow at a slower compounded annual growth rate (CAGR) of 3.7 per cent to RM4.3 billion next year from RM4 billion last year.
Managing director Liew Thiam Leong said this growth was expected to be driven by the government’s stimulus packages and other economic measures that would spur construction projects and create demand for precast concrete products.
He said the precast concrete industry had grown to RM3.9 billion in 2019 from RM3.3 billion in 2017, recording a CAGR of 8.7 per cent during the period.
However, the Covid-19 pandemic and subsequent Movement Control Order restrictions last year impacted the industry.
“But we believe that demand for precast concrete products will rise this year. This is because precast concrete products have many advantages over cast-insitu concrete products.”
Cast-in-situ concrete structures are poured, moulded and cured on site.
As at Jan 15, UCI Resources’ unbilled orders for precast concrete products stood at approximately RM12.4 million. These orders are expected to be billed progressively over the next six months.
Liew said the group’s primary focus was on increasing its market share in Peninsular Malaysia and venturing into Sabah and Sarawak.
Touching on raw materials, he said the company was constantly monitoring the fluctuation in raw material prices.
“We obtain supplier commitments to predetermine prices of materials and supplies prior to securing an order. Another advantage is that we have established a good business relationship with our raw material suppliers and this eases our purchasing negotiation.
“We are also aware of the government’s bid to reduce local manufacturers’ dependency on foreign labour. Therefore, we have started sourcing for more local workers,” he added.
Meanwhile, UCI Resources initial public offering (IPO) entails the issuance of 33.4 million new ordinary shares, which represents 10 per cent of the group’s enlarged share capital of 333.4 million shares.
From the proceeds of RM5.01 million, RM3 million will be used to set up the group’s new manufacturing site in Bestari Jaya, Kuala Selangor.
“Once the new site is completed by year end, we expect the manufacturing capacity for our precast concrete products to increase to 93,600m³ per annum from 62,400m³,” he said.
UCI Resources had previously supplied precast concrete products for, among others, the Subang International Light Industrial Park, Kuala Lumpur International Airport 2, Mass Rapid Transit (MRT) Jalan Semantan and MRT Kajang stations, East Klang Valley Expressway and the Sungai Besi-Ulu Kelang Elevated Expressway.