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Wednesday, July 29, 2015

Astino to invest RM100mil in new facility

GEORGE TOWN: Astino Bhd plans to invest over RM100mil in a new multi-system agro-house production facility in Nibong Tebal by the end of the year.
Group managing director Ng Back Teng told StarBiz the group had identified a 10-acre project site in Nibong Tebal where the group already has an existing agro-house production facility.
Astino also has similar agro-house facilities in Bukit Beruntung in Selangor, Malacca and Pahang.
“We will finalise the plans before the end of the year. Should the economy of the country worsen, we may not proceed with the plans.
“The performance of the group in this fourth quarter will play a key role in confirming the plans,” he said.
“Should Astino go ahead with the project, the group would start construction work early next year,” he added.
The agro-house business is expected to generate about RM60mil or 15% of group turnover for the 2015 fiscal year ending July 31.
“Next year, we can expect the contribution to be over 20%,” he said.
Ng said the group still had RM30mil worth of agro-house products to deliver to local and overseas customers before year-end, which would be recognised in the 2016 financial accounts.
Astino sells about 80% of its agro-house products in the country, while exporting the remaining 20% to the Asia-Pacific region.
Moving forward, Ng said the group still had 60 acres landbank in Nibong Tebal which would be used for the development of industrial property.
“This landbank includes a 21-acre site which we purchased for RM19mil.
“The plan is to set up light and medium factories on a one- to two-acre site for rental, to generate recurring income or for sale,” Ng added.
Astino expects the margin for the 2015 fiscal year to drop slightly.
“This is due to the rising cost of imported materials, which has gone up due to the weakening ringgit.
“Sales have improved, but margins have declined. The group is in the process of retrieving about RM10mil of the goods and services tax rebate from the Government,” he said.
On its roofing product business, Ng said the group still had more than three months of roofing and building material products with a value of RM150mil to deliver before year-end, which would be recognised in the 2016 financial books.
For its nine months for the 2015 fiscal year ended April 30, Astino posted RM19mil in net profit on the back of RM387mil in turnover, compared with the RM21mil and RM363.9mil achieved in the same period last year.

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