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Thursday, April 30, 2015

Higher output boost for Can-One

PETALING JAYA: Tin can manufacturer, Can-One Bhd, is expecting the additional production capacity that is being put in place for its dairy and non-dairy products division to help it improve its performance this year.
Executive director/chief operating officer Marc Yeoh said the company should be able to maintain its performance this year or do slightly better.
He said raw material prices such as sugar, milk and tin plate have softened and that the RM30mil spent for additional capacity for its milk products would help it grow.
“We are installing additional capacity. Prices of raw materials have also come down compared with last year. This is somewhat positive to the group,” he said after the company’s AGM yesterday.
“We are looking at additional 30% to 40% capacity. We should be able to consume 15% (of the additional capacity) immediately and the whole new capacity will take a digestion period of 1.5 years,” Yeoh said.
Can-One basically has two business division – the packaging division that produces tin cans and jerry cans and food division that processes dairy and non-dairy products. It also controls Kian Joo Can Factory Bhd, the country’s largest manufacturer of aluminium cans, via its 32.9% stake.
Chief financial officer Khoo Kay Leong said the company was looking at a high-single digit growth in revenue this year baring unforeseen circumstances.
Executive director Tan Beng Wah said its food and beverage division was still the largest contributor to the group’s turnover.
He said the goods and services tax (GST) impacted the company’s cashflow to the tune of RM10mil.
“We have to pay the Government before we can collect it from customers. This will only impact our cashflow in the first two months (of GST implementation),” Tan said.
In the last financial year ended Dec 31, 2014 (FY14), Can-One posted a net profit of RM63.7mil on revenue of RM898.9mil.
Its associate company, Kian Joo posted a lower profit of RM35.9mil to Can-One group for FY14 compared with RM39mil in FY13. This was mainly due to higher material and operating costs incurred by its general cans division and losses reported by its cartons division due to foreign currency exchange losses and loss arising from derivative financial instrument due to weakening of the ringgit.
On the offer by Aspire Insights Sdn Bhd to acquire the assets and liabilities of Kian Joo for RM1.47bil cash, Can-One’s Khoo said the company was not sure if a deal could be done by September this year.
Aspire’s offer for Kian Joo values the company at RM3.30 per share. Aspire is 60% controlled by Chee Khay Leong, a former senior executive of Can-One through a private company Alleyway Sdn Bhd. The Employees Provident Fund owns the remaining 40%.
“We will not be able to answer. It will depend on the other party, whether if he loses, he will appeal again. It depends on the judgement which will be out in the next few months,” Khoo said.
He said the date of the business sale agreement with Aspire has been extended to September, after it was previously extended to March 31.
A shareholder of Kian Joo Datuk Anthony See Teow Guan had filed an appeal on his suit against Can-One and few others. In his suit, See had alleged that Aspire Insight and Can-One were related parties, and hence, the latter should not be allowed to vote in the proposal for the sale .
See’s contention is based on the grounds that Alleyways is controlled by Chee.

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