KUALA LUMPUR: VS Industry Bhd, one of the world’s top 50 electronic manufacturing services (EMS) providers, has set its sights on expanding its customer base, leveraging on its vast experience in handling global clientele.

Its managing director Datuk Gan Sem Yam said at VS Industry’s annual general meeting (AGM) yesterday that the group has ample production capacity in its manufacturing facilities in Malaysia and Indonesia to take on more sales orders from existing and new customers.

He said that in recent years, Southeast Asia has become a preferred destination for international brands to source their manufacturing requirements. This is due to the region’s easy access to emerging Asian markets, low manufacturing costs, accommodative pro-business government policies to spur growth in the manufacturing sector, as well as the strong support system from raw material supply to a highly-skilled workforce.

Since the 1980s, VS Industry has established a strong reputation for supporting customers from Japan, Europe, the United Kingdom and the United States, he said.

“We continue to be in talks with several potential customers in the consumer electronics space, and hope to capture this demand,” Gan said. VS Industry has been able to undertake end-to-end EMS functions, from mould-making and injection to assembly, packaging and logistics.

For the first quarter ended Oct 31, 2014 (1Q15), VS Industry’s net profit tripled to RM35.2 million from RM9.6 million a year ago on higher sales and positive operating leverage. Revenue increased 24.5% to RM544.6 million compared with RM437.3 million previously.

Gan said the weakening ringgit against the US dollar will not adversely impact VS Industry, given that its exports and corresponding purchases are denominated in the green back.

“We enjoy a natural hedge as we buy certain raw materials and also make a portion of sales in US dollars. The nature of our business as a manufacturer-cum-exporter essentially shields us from the weaker ringgit and may prove beneficial to the group,” said Gan.

At the AGM, shareholders approved a final single-tier dividend of 3.5 sen per share in respect of the financial year ended July 31, 2014 (FY14). Together with the three interim dividends of 2.2 sen, 2.5 sen and 3.5 sen paid earlier, VS Industry declared total dividends of 11.7 sen per share for FY14.

The dividend payout of RM22.5 million translates into 42% of the group’s FY14 net profit, which is in tandem with its 40% dividend policy.

This article first appeared in The Edge Financial Daily, on January 6, 2015.