Tecnic to focus on five core segments

Tuesday April 27, 2010
By SHARIDAN M. ALI


BANGI: Tecnic Group Bhd, a plastic products manufacturer, will continue to rely on a business model that helped turn it around in 2005, said its executive director Ivan Gan.

The company, formerly known as STS Tecnic Bhd, was a loss-making company before a new management took over in 2004 and implemented an already existing business model.

Executive director Ivan Gan said prior to that the implementation was hampered by limited funds to acquire equipment and human resources that were much needed for the company to grow.

“It was in trouble after the Asian financial crisis in 1997. But, when we came in, the debt were gradually decreased over the years, investment were made to expand the company and we started marketing aggressively for new customers a few years back,” Gan told StarBiz.


He said the new management introduced electrical and electronics as well as automotive sectors as part of the turnaround plan.

Tecnic now boasts five core segments including medical, industrial and consumer packaging as well as oil and gas. The mix gives it the edge over rivals in the plastic components industry.

The company returned to the black in 2005 from a net loss of RM6.3mil in 2004 and recently posted a net profit RM13.1mil in the previous financial year ended Dec 31, up 52% from previous corresponding year.

Revenue was at RM137.5mil, up 25.8% for the period under review and the company which now has zero gearing, has also proposed a final dividend of 16 sen per share.

As of Dec 31, 2009 its cash and its equivalents stood at RM10.8mil.

“Our involvement in a mixed range of sectors has made us resilient during recession. Although some sectors are badly hit by the global economic crisis, we can still rely on the other sectors that are still growing in demand such as consumer packaging and medical.That was why we still recorded strong growth in 2008 and 2009,” he said.

Among its notable customers are Panasonic, Samsung, Sony, Unilever, Cadbury, Carlsberg, Shell, Petronas, Exxon Mobil and BP Castrol.

Gan said Tecnic’s strength in plastic moulding was an added advantage over the other players, armed with latest tooling technology such as overmoulding, double-injection, multi cavities, gas assist injection and electric moulding just to name a few.

“This has enable us to produce high gloss, precision and rigorous quality products,” he said.

This year, Gan said Tecnic had targeted 20% growth in both top and bottomlines in tandem with growing demand from its customers.

“Our capital expenditure (capex) this year will be around RM6mil to RM8mil focusing on technology upgrading. Our capex this year is lower than 2008 and 2009 that stood at RM13.1mil and RM10.2mil respectively as the company spent a lot on expansion of its factory expansion including land acquisition in the last two years,” he said.

Currently, the company is utilising between 65% and 70% of its total facilities’ capacity.