Asia File scouts for acquisition targets in Europe

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Filepic of Asia File office in Puchong, Selangor. The firm currently has three manufacturing plants in the UK and two in Germany. The Edge file photo

GEORGE TOWN: Asia File Corp Bhd, the stationery maker best known for its ABBA brand, is looking to strengthen and expand its presence in Europe through acquisitions.

The group currently has three manufacturing plants in the UK and two in Germany. Asia File is ranked the largest filing products maker in the UK education sector.

Group chairman and managing director Datuk Michael Lim Soon Huat said Asia File is more interested in acquiring companies related to filing products rather than merging, particularly if there is a synergistic value.

“We have a very strong base in Europe [and] the gross domestic product (GDP) growth there is higher. We are interested in longevity and the European market contributes about 73% to our annual revenue,” he told reporters after the group’s annual general meeting here yesterday.

Another 7% of the group’s revenue is derived from the Malaysian market and about 20% from exports to the US, the Middle East, Australia and New Zealand.

“While we are number one in the UK in the education sector, we want to expand our Europe business where we currently produce indices and dividers. We want to go big in the filing products sector. There is a big area of growth there,” he said.

In the UK, Asia File supplies to giant retail stationery makers such as Staples Inc, WHSmith plc and Ryman Ltd.

While Asia File is a sought-after player in the UK due to its acquisition of reputable companies where their brand names are preserved, Lim said the group also promotes its own ABBA brand of files there.

He said Asia File’s good performance in the UK filing products market has pushed its revenue to surpass the RM100 million mark in the first quarter ended June 30, 2014 (1QFY15).

“The figure for 1QFY15 was RM104.32 million. It was a big achievement for us. Our sales in the UK increased by 20% and in the rest of Europe by 30% in the quarter.

“We are growing in a nice way ... we are looking to grow 20% to 30% annually in Europe,” Lim said, adding that the growth was a result of various buyovers and turnovers last year.

Asia File in 2008 acquired German Plastoreg Smidt Gmbh for €13.8 million (RM57.26 million) before purchasing paper mill Higher Kings Mill Ltd in the UK for £1 million (RM5.31 million).

Another €4 million were spent on the acquisition of manufacturing plants and purchase of equipment in Europe, including in the Czech Republic and France, which increased its turnover by 50%, said Lim.

With an accumulated asset value of RM100 million, he said the “cash in hand” would enable it to consider acquiring another business in the UK to grow its business there.

This article first appeared in The Edge Financial Daily, on September 30, 2014.