Product mix strategy maintains top line growth at 20%, says Hsu Fu Chi5pt medium; padding: 0in 5.4pt; width: 1.25in; background-color: transparent">US$961,000
Tour of Nico Steel Technology (electroplating line)A 15-minute drive from Nico Steel Centre brought us to Nico Steel Technology where Nico Steel’s new electroplating operation is situated.
A key point to note is that with China’s focus on environmental protection, the Chinese government has tightened regulations on issuing electroplating licenses in an effort to battle the constant dumping of untreated waste from electroplating processes into rivers and water systems.
Nico Steel’s newly-awarded electroplating licence, hence, is a boon to the company, enhancing its value-added services to its customers.
Nico believes it has uniquely positioned itself by developing strong marketing relationships with the end users of its products.
These relationships help Nico to go directly to the end-users where they may pre-approve or even request for Nico's products when dealing with contract manufacturers. This is especially important if its product is a replacement for a widely-used industry standard.
Linair CEO Jemme Ong gave an overview of each business operation of Linair and their respective industries.
Linair's manufacturing facility.
Linair has businesses relating to air ducts, biodiesel and engineering.
The duct manufacturing industry is competitive and fragmented, with many small players.
The barriers to entry, however, for the manufacturing of FM Approved ETFE-coated ducts are high.
Linair is the only provider of FM Approved ETFTcoated ducts in Southeast Asia.
| Linair||FP ’07 (ended Sept 31 ‘07)||FY’06||% change|
|S$51.7 m ||S$22.4 m||+130|
|Net profit||S$2.0 m||S$1.1 m||+79|
Note: FP’07 denotes 12-month period ended Sept ’07.
FY’07 is a 15-month period ended Dec 31 ’07, following a decision by the company to change its year-end.
Prospects for the biotechnology industry in the region remain favourable, driven by continued economic growth and strong backing from several Asian governments, which have identified biotechnology as a top strategic priority and an industry with tremendous growth potential.
With heightened awareness and pressure to reduce CO2 emission in China, there will be demand in China for environmental control and alternative “clean” energy.
Linair is currently exploring opportunities in other industries that require its expertise and skills. Linair is also exploring M&A opportunities to expand its range of services.
The Group highlighted that foreseeable demand for the ducts is larger than existing supply. As a result, management feels confident to embark on an expansion strategy in 2008.
Tour of Linair Plant (Suzhou)
IVC units for storing experimental animals like mice.
Linair’s plant is located in Suzhou Industrial Park, the biggest cooperation program between China and Singapore committed to develop into a high-tech industrial park with international competitiveness and a modern, international garden-like township.
Leveraging on Linair’s expertise in the design and provision of critical airflow control systems, the Group has developed 2 proprietary laboratory air-flow control products - the laboratory fume hood and IVC.
The laboratory fume hood is used for removing toxic gases and fumes, while the IVC is used for storing experimental animals like mice.
Following the plant visit, Linair announced that it has sold 42 units of the IVC System to National Laboratory Animal Centre, Taiwan. The contract value was NTD 43.9 million (approximately S$2 million).
This is a significant milestone as the Group beat many overseas IVC brands to secure the contract.
FY2008 will be the start of a new era of growth for Linair, as explained in the FY2007 results announcement. China will be a key growth driver in 2008 as the Group undertakes measures to enhance manufacturing productivity.
Yen Tan is a consultant with Financial PR, Singapore's largest investor relations company.
Part 2 of her report to be published on Friday will be on two other companies: Global Ariel and Link Hi.
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