GUH to expand PCB ops to meet rising demand

GEORGE TOWN: GUH Holdings Bhd is planning to expand its printed circuit board (PCB) manufacturing business over the next two years to meet rising demand from the major domestic appliance (MDA) and automotive sectors.

Group managing director Datuk Kenneth H’ng told StarBiz that the group would add new production lines for the plant in Bayan Lepas, which is more than 80% utilised.

“Although we have yet to finalise the expenditure, the initial spending would be more than RM10mil,” he said.

GUH’s PCB manufacturing plant is in Suzhou, China, which is also over 80% utilised.

According to H’ng, although the global economy is still facing challenging times, the PCB segment is projected to grow steadily over the next decade, driven by the MDA and automotive segments.

“This is why it is necessary to expand to position the group on a stronger foothold to compete for new business opportunities,” he said.

In the second half of the year, the group, which manufactures PCBs for the MDA sector of international brandnames, expected to deliver a slightly higher volume of PCBs for its customers worldwide.

In the same period of 2016, GUH shipped out about RM136mil worth of PCBs.

Global market research provider Accuray Research has forecast that PCB growth would reach US$85.26bil by 2025, riding on a compounded annual growth rate (CAGR) of 3.5%.

GUH supplies about 20% of its total production of PCBs to the automotive segment, which is projected to grow this year.

Scotiabank reported that in January 2017, sales in the developing markets of Asia, Eastern Europe and South America accelerated to 6% year-on-year, the best performance since May 2013.

“Continued gains in global car sales in early 2017 highlighted the improving economic backdrop around the world and solidified the positive sales outlook, even as purchases in China moderate from last year’s record-setting gain,” Scotiabank said.

Meanwhile, IHS Markit has forecast that total global light vehicle sales will reach 93.5 million units in 2017, up 1.5% over 2016.

On the MDA market, H’ng said GUH supplies over 50% of the group’s PCBs to the segment.

“Fresh models with innovative features and technological advances will spur the adoption of modern household appliances worldwide,” he said.

A Technavio market research report has estimated that the market for household appliances in Europe will grow at a CAGR of over 3% by 2020.

On its water treatment business, H’ng said GUH was tendering for seven projects valued at about RM140mil in the country.

“The unbilled sales from the water treatment segment is RM110mil,” he said.

On GUH’s property business, H’ng pointed out that the group would launch light industrial factories in Seberang Prai with a RM150mil gross development value (GDV) this year.

“These are three-storey semi-detached light industrial factories, with a modern contemporary design concept suitable for small and medium businesses,” he added.

In Seremban, GUH will launch 50 units of detached houses with a GDV of RM75mil, priced between RM1.3mil and RM1.8mil, according to H’ng.

This is why it is necessary to expand to position the group on a stronger foothold to compete for new business opportunities. Datuk Kenneth H’ng