Friday 29 Mar 2024
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This article first appeared in The Edge Financial Daily, on April 19, 2016.

 

Danny-Sin_FD_19Apr16_theedgemarketsPETALING JAYA: SKB Shutters Corp Bhd is eyeing more racking solutions and automated storage and retrieval system (ASRS) business in Southeast Asia after securing a US$10.8 million (RM42.12 million) contract in Vietnam.

The company, traditionally involves in manufacturing and supplying roller shutters and steel doors, saw its share price rise 22% yesterday on news of the contract.

The contract was awarded by Hung Duong Corp Ltd, one of the largest seafood processing and export group in Vietnam, for the supply of racking solutions and ASRS for the latter’s cold room. Hung Duong is building the country’s largest cold room in Ho Chi Minh City with an investment of US$50 million.

Speaking to reporters after the signing ceremony yesterday, chairman Danny Sin said he expects to see more business from the racking solutions and ASRS systems once the Vietnam project kicks off.

He said the proximity of SKB to other Southeast Asian countries is one of the company’s main competitive edges against European companies that provide similar solutions and services.

“The contribution of the contract will come in the financial year ending June 30, 2017,” he said.

Meanwhile, SKB executive director Michelle Sin said the company is not only supplying the racks but also the software and solutions.

She disclosed that the racking business currently accounts for 20% to 30% of the company’s revenue.

“With ASRS, the contribution will be more,” she said.

She said the company is expanding its product range by collaborating with a new partner, therefore the capital expenditure for the business is minimal.

SKB is partnering with Formosa Heavy Industries Corp for the automated system in this project. It is also working with CycleWorld Corp Sdn Bhd, a polyurethane panel manufacturer in Southeast Asia, and one of the largest cold room panel manufacturers and installers.

“ASRS is the way to go moving forward as labour and land will be issues faced by businesses,” she noted.

Located in Ho Chi Minh City, the new Hung Vuong cold room warehouse is for its storage and distribution of processed seafood for export purposes. The facility is expected to have storage and distribution capacity of about 60,000 tonnes.

Hung Vuong president Duong Ngoc Minh said the piling work for the cold room had already started and the construction is expected to be completed by the first quarter of next year.

According to him, the demand for cold rooms is on the rise as Vietnam and the group are seeking to build more cold rooms in the country.

Hung Vuong exported about RM1.6 billion worth of fish products in 2015 to key markets in Europe and the United States.

SKB Shutters shares closed 11.5 sen higher at 63 sen yesterday, with a market capitalisation of RM25.2 million.

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