WAH SEONG

WAH SEONG CORP's industrial services division expects to be busy in 2009 with new projects and orders it is optimistic of clinching, said CHIN YOONG NGOK - Head of Industrial Division which was reported in THE STAROLINE on May 1, 2009. The division comprises three main operating units ? trading and distribution of building materials, manufacture of steel pipes (piling, structural and water) and supply and fabrication of specialised agricultural equipment.

CHIN YOONG NGOK said his division's performance in the 1QE Mar 2009 had held up well due to its business mix. The Company hopes 2009's results will be as good as 2008 or better as the Company benefit from the stimulus package and better crude palm oil prices leading to continued investments into equipment by oil palm players.

WAH SEONG's industrial services division recorded PBT of RM37.8m on Revenue of RM843.5m for FYE Dec 31, 2008. The division contributed 36% to Group Revenue and 24.7% of PBT in 2008.

PIPE BUSINESS
On the pipe business, CHIN estimates the current demand for piling pipes in the country and Singapore to be about 120,000 tonnes, worth RM400m. Based on the division's over 25-year track record in the industry and the success rate it has achieved so far, he is optimistic of securing half of the amount by the 3Q of CY2009. The main export market for WAH SEONG's pipe division is Singapore with the division having secured several major orders there.

He said that the Company will also stand to benefit from large-scale infrastructure projects that are coming on line as part of stimulus packages now being used extensively to mitigate the impact of the economic slowdown.

PIPE PRODUCTION EXPANSION
The division is upgrading its plant in Seberang Prai, Penang, to increase production capacity to 100,000 tonnes of pipes per annum from the current 60,000 tonnes in anticipation of more orders.

CHIN says everything should be completed by Jun 2009. The new line can produce bigger pipes up to three metres in diameter and enable us to supply to larger projects.

PIPES ORDER BOOK
To-date, the pipes division has an Order Book of about RM200m for projects locally and in Singapore until the 4QCY2009. They also plan to penetrate the Australian market by the first half of 2010 as the demand for water pipes there is huge with hundreds of kilometres of pipes required.

EQUIPMENT DIVISION
For the equipment division, WAH SEONG aims to broaden its product range, customer base and expand market coverage. Service and maintenance of equipment to palm oil mills also provides the division with ongoing and recurring income.

At present, the equipment division has about RM60m worth of orders in hand. On average, the equipment division generates revenue of about RM10m a month. CHIN sees pretty bright prospects for the building materials business, especially if the Government's stimulus packages take off.

BUILDING MATERIALS DIVISION
One of the top five building material distributors in the market in terms of turnover, WAH SEONG has 500 customers, 11 branches and four warehouses.