LIMAHSOON's experience, lucrative mart
promise favourable growth
New Straits Times,
8 July 2004
LIMAHSOON Bhd's 14-year experience in the
laminated board business and an overall lucrative furniture
market is promising the company favourable growth.
Wood has become big business, coupled with the Government's
active participation in stimulating growth of wood-based
industry, including through tax incentives.
LIMAHSOON is a market leader in the domestic laminated board
market, commanding an 8 per cent share valued about RM522
million last year.
Now in the final stages of its flotation on Bursa Malaysia
Bhd's Second Board, LIMAHSOON produces 2,500 tonnes of laminated
board a month.
It has two factories, the second one on 6.07ha with 2.42
ha available for further expansion.
In an industry expected to grow an average of 5 per cent
a year for the next five years, LIMAHSOON has eight primary
competitors.
About 90 other laminated board producers manufacture the
product only for their own use.
The main end-users of laminated boards are particularly
local producers of wooden furniture and fixtures.
Among LIMAHSOON's customers are Kimble Furniture Corp (M)
Sdn Bhd, Latitute Tree Furniture Sdn Bhd, Rhong Khen Industries
Sdn Bhd, Step Furniture Manufacturer Sdn Bhd and Hup Chong
Furniture Sdn Bhd.
LIMAHSOON's managing director Lim Chong Khim said he is
optimistic in the growth prospect of the company based on
the strong Government support in the industry.
"The Government has helped stimulate the growth of
the wood-based industry," he said recently.
This year, Malaysia's furniture exports are expected to
grow by 10 per cent, from RM5.7 billion in 2003, which is
a record-breaking achievement after dipping RM4.8 million
in 2001, due mainly to the September 11 attacks in the US.
The Government is aiming for RM7 billion furniture sales
by 2005.
Lim said LIMAHSOON is not a static company and is already
planning to venture into manufacturing furniture components
such as tabletops, chair sets and backs, table and chair
legs and bed components by this year.
"Users for laminated boards are mostly furniture makers.
By producing furniture components, we are able to provide
a larger range of products for our customer," he said.
On the availability of rubberwood, Lim said the company
plans to act as a central buying body for rubberwood logs
and provide incentives for small rubber plantation owners
to encourage them to be the group's suppliers.
"We aim to consolidate small rubber plantation owners
to supply their trees once it has reached the end of its
productive lives, and also to improve the standard of living
for these plantation owners by selling the trees to a proper
body," he said.
He also said areas replanted with rubberwood trees have
increased at an average rate of 1 per cent per year ensuring
continued supply of rubberwood.
LIMAHSOON tries to utilise every part of rubberwood logs
to maximise the usage of waste products.
The group is setting up a wood chips production line at
an investment between RM500,000 and RM1 million which would
start production by the third quarter of this year.
Wood chips are produced using rejected timber pieces and
cut-offs.
The wood chips are used for reconstituted or composite fibre
boards such as medium density fibre board and particle board
mainly for lower-end users.
Lim said the group is also looking at exporting its laminated
boards regionally and to the West Asian markets by next
year. At present, only 3 per cent of the group's revenue
is derived from its exports to Germany, India, South Korea
and Japan.
LIMAHSOON was incorporated in 1982 by Lim's late father
Lim Ah Soon. It started as a sawmill known as Kilang Papan
Lim Ah Soon Sdn Bhd and has shown impressive growth ever
since.
The company is now managed by Lim and his four other brothers.
For its financial year ended December 31 2003, LIMAHSOON
registered a net profit of RM6.8 million on the back of
a RM44.9 million revenue.
It is forecasting revenue to increase by 5.3 per cent to
RM47.3 million this year.
For its floatation, the group is making a public issue of
16.4 million new ordinary shares of 50 sen each at RM1.08
a share. Upon listing, the issued and paid-up capital of
LIMAHSOON will increase to RM40.2 million.
"The total gross proceeds of the group's listing of
RM24.7 million will be utilised for capital expenditure,
working capital and repayment of bank borrowing," he
said.
LIMAHSOON is aiming for a listing by the end of July.
Link captured from: www.nst.com.my
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