KLANG: YKGI Holdings, one of Malaysia’s top-three flat steel producers, expects the new continuous colour-coating line (CCL) to increase its colour-coated products revenue to RM250 million by 2014.
Formerly known as Yung Kong Galvanising Industries Bhd, the steel player is mainly involved in midstream and downstream activities, including manufacturing of pickled and oiled hot rolled coils, cold rolling, galvanizing and steel products coating.
The new facility will have a total output of between 80,000 and 100,000 tonne a year.
“The facility commenced operation since March this year, and it now runs at 55 per cent to 60 per cent capacity,” said managing director Datuk Soh Thian Lai.
YKGI spent RM30 million to purchase and construct the new line.
The company projects its new production line to contribute RM100 million of additional sales. This will make the colour-coated products turnover increases to RM250 million by next year, representing half of the RM500 million projected revenue.
With the new CCL facility, YKGI’s central plant in Klang is now housing four production lines and producing between 250,000 and 300,000 tonne of annual output.
In total, there are eight CCL facilities in Malaysia, with YKGI having two at the moment.
While domestic market still provides vast room to grow, Soh sees new business opportunities and stiff competition stemming from 2015 Asean Economic Community.
“We hope to export 30 per cent of colour-coated products to Asean region by 2015," he told a media briefing here yesterday.
He said the company is targeting RM100 million worth of exports to the region, with two prime markets, namely Indonesia and Thailand.
Currently, YKGI has yet to tap into the Asean market and it only exported products to some emerging economies like Bangladesh and Sri Lanka. Overseas markets currently made up less than 10 per cent of the company's turnover.
In line with its regional expansion initiative, YKGI would set up an operation hub in Asean to facilitate business activities.
Soh, who has over 28 years of experience in the steel industry, sees high potential for colour-coated products usage.
The company offers low, mid and high-end products to cater for different market segments.
“Our targeted clients include power plants, factory buildings and warehouses, MRT stations and housing developers,” he said.
Going forward, YKGI plans to transform itself as an integrated steelmaker by tapping into upstream activities.
Declining to divulge further details, Soh said the company will undertake a 80,000 sq m extension plan this year, which will cost them RM10 million.