This article first appeared in The Edge Financial Daily on April 26, 2017

KUALA LUMPUR: Kian Joo Can Factory Bhd will keep its focus on strengthening its Myanmar foothold, where it has begun construction of two manufacturing plants, before tapping into other foreign markets, says its group chief financial officer Ooi Teik Huat.

The plants are located in the Thilawa Special Economic Zone — one is for Kian Joo’s can production and another is for its subsidiary Box-Pak (M) Bhd’s manufacturing of corrugated cartons.

Kian Joo, which has been exporting its products to Myanmar, wants to replicate its business model in Malaysia in Myanmar, where it intends to have tin can, box carton manufacturing and contract packaging capabilities.

The construction of the plants requires an investment of some US$23.5 million (RM102.7 million). The group anticipates spending another RM350 million to set up both plants and their production facilities, Ooi told reporters after the group’s annual general meeting yesterday. It hopes to begin commercial production at the plants in the fourth quarter of 2018.

“Our [priority] is the Myanmar market. We need to be very focused as we do not have deep pockets. With our capabilities and current human capital, we will concentrate on this market and build [on] it before expanding elsewhere,” Ooi said.

Excluding the two upcoming factories, Kian Joo has 18 plants in Malaysia and three in Vietnam. It has a plot of land in Indonesia measuring about 20 acres (8.09ha) which the group can develop for future growth, though it has no immediate plans to do so, said Ooi.

Its Malaysian operations continue to be the group’s largest revenue generator, contributing RM939.66 million or 54.7% of its top line for the full financial year ended Dec 31, 2016 (FY16), while Vietnam was second at 32.3% or RM554.46 million.

“What we are doing is to try to grow the company and evolve into a regional packaging material player recognised in Southeast Asia, [using Myanmar as our stepping stone],” Ooi said. “We have to relook at our marketing efforts to improve the export side of the business to boost revenue growth,” he added.

In FY16, Kian Joo’s net profit dipped 2% to RM128.61 million from RM131.31 million, though revenue grew 7.2% to RM1.72 billion from RM1.6 billion.

For FY17, Kian Joo is targeting a double-digit top-line growth, driven by higher production capacity of its aluminium can division and growing export activities, Ooi said.

“We expect similar results this year. The business operating environment is getting tougher, but we are working hard to defend our numbers,” he added.