Reports » Malaysia

Malaysia stock market and companies daily report (January 04, 2013)

Contributed by Shares Investment

Fire Incident At Notion VTec’s Manufacturing Plant
Notion Vtec announced on Wednesday that a fire had occurred at the rear building of its main manufacturing plant in Klang, Selangor. The fire which broke out on Monday afternoon during working hours had affected the company’s wholly-owned subsidiaries, Kaiten Precision (M) (KPSB) and Notion Venture (NVSB). The fire department and insurance representatives are still investigating to determine the cause of the fire. A site examination had revealed that a section of the factory premises was gutted by the fire. Out of the 1,500 computer numerical control (CNC) machines in inventory, only about 100 were lost. “There is also substantial damage to goods belonging to KPSB and NVSB that needs to be ascertained. Nonetheless, these assets (CNC machines and goods) are adequately covered by insurance,” said the company. The consequential loss of business is also being covered by insurance. Currently, the company is estimating the extent of the damage. An assessment on the financial impact caused by the fire is being carried out and the company will make further announcements later.
Significance: The fire had caused about 90 percent loss of capacity temporarily for its subsiadiary KPSB, which contributes about 10 percent to group revenue and some disruption to certain operations of NVSB.

V. S. Industry Anticipates Higher Contributions From Keurig To Group Revenue In FY2013
V. S. Industry (VSI) expects higher contribution from Keurig Incorporated (Keurig), a manufacturer of single-cup brewing systems. Since the launch of the manufacturing plant for Keurig Single Cup Brewers in November 2011, the combined efforts of both parties had brought high-quality brewers to the global market. This is according to VSI managing director Datuk Gan Sem Yam in a statement on Thursday. VSI had been entrusted to manufacture another model of the Keurig Single Cup Brewer this year, which would also be exported overseas. “With the uptrend in sales orders, we anticipate Keurig to contribute approximately 10 percent to group revenue in the financial year ending 31 July 2013” added Gan. Through its manufacturing plants in Malaysia and Indonesia, VS produces value-added products for customers from Europe, Japan, Australia and USA, including international leaders in vacuum cleaners, single-cup coffee brewers, touchscreen displays and others. The higher sales orders from new customers such as Keurig were due to the positive results of its customer expansion initiatives.
Significance: Despite the waning global demand from on-going economic uncertainty, VSI remains optimistic of the outlook in the Electronic Manufacturing Services sector in the long-term. In  view of the challenging year ahead, VSI is constantly focused upon enhancing its operational and cost efficiency to sustain the group.

Destini Acquires Glenmarie Property To House New HQ
Destini had acquired an industrial property at the Hicom-Glenmarie Industrial Park in Shah Alam for RM14.8 million to house its new headquarters. In a filing to Bursa Malaysia on Thursday, Destini had proposed to refurbish the property to be used for the servicing of aviation and marine safety survival equipment. This will include among other things to extend its existing workshop facilities and new calibration workshop. At this point, the cost of the refurbishment is yet to be determined. The refurbishment process is expected to be completed in stages and within five months of the property being handed over to the company. On 2 January 2013, Destini had entered into a sale and purchase agreement with CSL Manufacturing (M) to acquire the freehold industrial land for RM14.8 million cash, which would be financed through a combination of internally generated funds and external bank borrowings.
Significance:  On the rationale for the acquisition, it said that the relocation of the current workshop facilities and headquarters of the company to the new property will enable management to better manage its logistics, servicing and procurement requirements, at a centralised location.