Indonesia contributes significantly to Unimech’s turnover
GEORGE TOWN: UNIMECH GROUP BHD expects Indonesia, its largest overseas market, to contribute significantly to the group’s revenue this year despite the threat of Covid-19 still hanging over the republic.
According to executive director YF Sim, Indonesia’s revenue contribution is likely to remain at around 26% this year, compared to the previous year.
Unimech is one of the leading groups of value-added engineering companies in Malaysia with a market capitalization of approximately RM220.12 million.
Sim told StarBiz that “Our West Java valve production plant, which started operating at the end of last year, will benefit from the Indonesian government’s plan to expand the capacity of its domestic shipping industry by 85,000. deadweight tonnes (DWT) in 2015 to 300,000 dwt by 2025.
“Indonesia aims to expand its knowledge and improve its national design capability through its national naval engineering companies. “
Therefore, Indonesian maritime players should continue to improve their capabilities and build more specific classes of ships, including the Korvet, the frigate, cruise ships, liquefied petroleum gas carriers and liquefied natural gas carriers.
Another important factor is that Indonesia is expected to produce 44.5 million tonnes of palm oil in 2021-2022, up from 43.5 million tonnes in 2020-2021.
The country’s palm oil exports are also forecast to increase by 1.5 million tonnes year-on-year to 29.5 million tonnes in MY 2021-2022, as higher production and lower prices. stockings are expected to encourage demand in China and the European Union, Sim explained.
“All of these developments in Indonesia, including increased production and exports of palm oil, are sure to increase demand for our industrial valves,” Sim added. Unimech currently has a total of 45 distribution centers and warehouses in Indonesia.
Last year, the Indonesian market contributed 67.637 million RM to the group’s income, boosted by the growth of the republic’s national economy.
Meanwhile, Sim said the group plans to deliver around RM286 million of industrial valves, fittings, pumps and instruments to its overseas and domestic customers this year, up nearly 10 percent from 2020.
“So far this year, we have delivered over RM100 million of products,” he added.
To date, Unimech’s main markets are Indonesia, Thailand, Australia, Singapore, Vietnam, China and the United States.
Globally, the overseas market contributes more than 45% to the group’s total turnover.
Locally, Sim stressed that the domestic market still remains the main market for the group.
“As we move forward, domestic demand will continue to drive growth in Malaysia with some support from net exports.
“Investing activities in Malaysia are also expected to remain resilient and overall export growth is expected to remain positive,” Sim said.
Therefore, Unimech’s business plan is to focus on expanding its valve, instrument and fittings market in the region, expanding its product line and increasing the group’s penetration in industries. oil and gas (O&G), he added.
In Malaysia, Unimech Group manufactures valve, instrument and fitting products at its facilities in Penang, Kedah and Perak while in China it has three factories in Tianjin, Dongguan and Huangshan.
According to the Data Bridge Market Research report, the industrial valve market will exhibit a compound annual growth rate of 3.66% for the forecast period 2021-2028.
This translates into an increase in the current market value to approximately US $ 100.30 billion (RM 419.9 billion) by 2028.
The report notes that the increasing demand for O&G activities, wastewater and electricity has led to an increase in demand for industrial valves.
“The growing demand for industrial valves by pharmaceutical companies recently due to the spread of the coronavirus has further boosted growth.
“Rapid urbanization and the construction of smart cities, coupled with the need and demand for a large connected network for transporting industrial equipment, have further created lucrative growth opportunities for the industrial valve market.” , adds the report.