GEORGE TOWN (Sept 9): Acme Holdings Bhd is expanding its plastic-component manufacturing division to mitigate a slower property development business.

Acme executive chairman Datuk Seri Dr Lee Kuang Shing said the group had set aside RM15 million to enhance its plastic products.

“Previously we were an original equipment manufacturer (OEM) for a Japanese company but we had narrowing profit margins from that business, so now we are going to produce our own new plastic products with our brand name.

“The development and design for the new products are already there, our focus for this two years (2015 and 2016) is to commercialise our products and to capture the local market, we target to achieve sales of RM5 million per month, just from our plastics division come 2017 onwards,” Lee told reporters after Acme's annual general meeting today.

Looking ahead, he said Acme would focus on overseas markets for its new products once the company establishes its local presence.

A slower Malaysian property market has prompted the developer to opt for smaller projects.
Lee said Acme adopted the build-and-sell approach for its 20ha (50 acre) mixed development in Teluk Air Tawar, Butterworth.

The project comprises 350 terraced houses and nine blocks of condominiums.

“We decided to adopt a build-and-sell approach and focus on cluster-sized developments rather than large-scale developments, given the current tough economic conditions being faced in the country and the banks’ stringent approach on housing loans,” Lee said.

Acme shares have not been traded so far today. The shares were last traded at 31 sen yesterday for a market capitalisation of RM65 million.

(Note: The Edge Research’s fundamental score reflects a company’s profitability and balance sheet strength, calculated based on historical numbers. The valuation score determines if a stock is attractively valued or not, also based on historical numbers. A score of 3 suggests strong fundamentals and attractive valuations.)