Economic downturn not new to Poh Huat

Monday May 10, 2010
By ZAZALI MUSA


Furniture maker more resilient after each recession

MUAR: Malaysian furniture manufacturers and exporters will emerge stronger each time after a regional or a global economic recession.

Poh Huat Resources Holdings Bhd managing director Tay Kim Huat said economic recessions were not alien to the industry as it had experienced them many times over the last 23 years.

He recalled that the industry was clouded by the global economic slowdown in 1988-89, followed by the Asian financial crisis in 1997-98, and the global recessions in 2001 and 2008-2009.

Tay said demand for made-in-Malaysia goods from international buyers started coming back in the last quarter of 2009 and had now improved.

“An economic slowdown is actually a good time to review and restrategise business activities to better suit the unfavourable economic conditions,’’ he told StarBiz after the company AGM on Wednesday.


Tay Kim Huat (left) and Khim Seng see economic downturns as time to restrategise

Tay said the company continued to work closely with its international buyers even during the economic recessions over the years.

He said this included introducing new ranges of furniture lines to suit the weaker consumer demand and change in spending pattern.

Tay said that for instance during the 2008-2009 recession, the company had introduced the lower and mid-range office and bedroom lines as demand for the products was good.

“This has helped us to maintain our market position in North America and Europe which are our two main export markets,’’ he said.

Meanwhile, director Tay Khim Seng said that although the two markets would remain important for the company, it would continue to explore new export markets at every opportunity.

He said that during the 2008-2009 recession, the company had successfully exported to several countries in the West Indies, northern Africa and Latin America.

Although exports to these places were small, Khim Seng said that nevertheless the company saw good prospects in the furniture market of these countries.

For the financial year ended Oct 31, 2009, Poh Huat Resources recorded RM329.64mil revenue and a net profit of RM10.14mil compared with RM385.23mil revenue and a net profit of RM7.36mil in 2008.