GEORGE TOWN: Penang-based Tek Seng Holdings Bhd, a polyvinyl chloride (PVC) product and photovoltaic solar manufacturer, expects the solar panel production segment to take over its traditional PVC business and become its main and only revenue generator in three years.

Its chairman Loh Kok Beng said its joint venture with Taiwan-listed Solartech Energy Corp to produce solar panels could easily replace its current PVC business, which contributes 70% to group revenue now, as its revenue mainstay.

“We have started setting up our second and third production lines. It should be ready for production by the first quarter of this financial year (ending Dec 31, 2015). We are in the midst of ramping up production of solar panels,” he told reporters after an extraordinary general meeting (EGM) yesterday.

“We expect this sector to contribute between 25% and 30% in the next quarter to our group revenue but by the end of the year it could generate 50% revenue, with the remainder from PVC products. However, when we maximise the lines to four by the end of the year with individual production capacity of 70mw to 80mw, we expect this sector to contribute 100% to our growth revenue in three years. Thus, we believe it can take over our traditional business. But we will decide then whether to make solar panel production a stand-alone business or make it our main business,” he added.

In September last year, Tek Seng signed a memorandum of understanding with Solartech which saw the latter investing RM100 million in Tek Seng’s 86.1%-owned subsidiary, TS Solartech Sdn Bhd.

The EGM saw the approval of a proposed 1-for-2 bonus issue of 120 million free warrants, and an increase in its authorised share capital from RM100 million of 400 million shares to RM500 million of two billion shares.

This article first appeared in The Edge Financial Daily, on January 14, 2015.