Roofing product maker Astino plans RM100mil expansion

BY DAVID TAN

 Roofing product maker Astino Bhd plans to allocate more than RM100mil next year to expand its multi-system agro-house business in Penang.

Group executive chairman and chief executive officer Ng Back Teng told StarBiz that the plan was to set up another multi-system agro-house production facility to raise the contribution of the business to the group’s revenue to 15% in two years.

He spoke after an EGM to propose a bonus issue of 137,059,000 new ordinary shares at RM0.50 each and to raise the authorised share capital to RM200mil from RM100mil.

Presently, the business generates about 10% of the group’s yearly turnover.

“We want to focus more on this segment because the residential construction sector is slowing down in the country, reducing the demand for roofing products.

“Currently, Astino exports the multi-system agro-houses to the Philippines and Indonesia,” he said.

On its new RM55mil coil plant in Bukit Beruntung, Selangor, Ng said the plant should start operations in two to three months.

“This is the second plant in Bukit Beruntung and the seventh for the group in the country.

“It is expected to generate RM4mil to RM5mil a month for the group when it starts full operations,” Ng added.

Astino has three plants in Penang, one in Bukit Beruntung, one in Malacca, and another in Pahang.

On the business performance for the 2014 fiscal year ended July 31 2014, Ng said it was expected to improve by 7% to 8%.

Last fiscal year 2013, Astino made RM31.6mil in net profit on the back of a RM511mil sales revenue, compared with RM33.2mil and RM436mil in 2012.

“Despite the slowdown of construction activities in the residential sector, we were able to maintain our sales due to factory projects.

“With the introduction of the goods and services tax (GST) next April, the slowdown in construction activities for the residential is expected to worsen.

“To mitigate the impact, the group will introduce a new range of roofing products and other building materials used largely in commercial buildings,” Ng said.

For the 2014 fiscal year, Ng said the demand for construction came not only from factories but also from government projects.

“In the 2015 fiscal year, we expect the monthly sales of the group to increase by 7% to 8% from the RM40mil to RM50mil monthly sales of 2013,” he said.