Molecor’s Malaysian arm targets RM90 mn turnover in PVC pipes

Malaysian public-listed company Fitters Diversified Bhd is expecting its newly added pipe manufacturing business, Molecor (SEA) Sdn Bhd , to contribute a maximum of RM90 million to its revenue for the financial year ending Dec 31, 2015, according to news reports. Fitters owns 65% of Molecor (with Ricwil (Malaysia) Sdn Bhd and Spanish pipe maker Molecor Tecnologia, holding the remaining 25% and 10% stakes respectively. The company is also investing about RM80 million in the first phase of its PVC-O pipe manufacturing facility in Gebeng, Kuantan.

Managing Director Datuk Richard Wong is quoted to have said that at full capacity with the three lines by June, the company expects to achieve the maximum revenue of RM90 million, with an average of 20% in profit margin.

The company’s PVC-O pipe plant, which was commissioned in the fourth quarter of 2014, is currently running on two lines, with the third production line to be up and running by June. The three lines will have the capacity to produce 11,000 tonnes or approximately 3,700 km of pipes/year. But on two lines production for 2015 will be around 7,000 tonnes.

The group has the exclusive rights to manufacture and market Spain-based Molecor Technologia’s patented PVC-O pipes in Southeast Asia.

Molecor Tecnologia developed and patented the "molecular orientation" technology using hot air that gives PVC-O pipes higher impact resistance and longer lifespan of up to 50 years, compared to the 30-year lifespan of conventional steel-based pipes. PVC-O pipes produced using Molecor's technology have a track record of effective implementations in Australia, Italy, France, Spain, South Africa, and Ecuador, says the company.

The Hypro-brand pipes provide operators, installers, engineers and water authorities an excellent solution for water transportation in Malaysia and Southeast Asia, says Molecor.

Wong said the group had already identified 11 stockists nationwide to distribute the pipes and hopes to formalise orders with the stockists by June.

The company has the capacity to scale up its operations up to 15 production lines as and when demand warrants it. The existing plant sits on a 8.5-acre site, which is Phase One of the production that can house up to six lines.

It is targeting to double production capacity by 2016 to 22,000 tonnes/year , with the addition of three more lines early next year.

Molecor (SEA) aims to export at least 10% of production to regional markets such as Cambodia, Vietnam, Myanmar and Brunei, among others.

The company has also received an RM10 million grant from the Malaysian Investment Development Authority (MIDA).

The grant, which is for a three-year period, is to be used to modernise and upgrade the facilities and equipment of the manufacturing plant.


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