KUCHING: YKGI Holdings Bhd, via its subsidiary ASTEEL Group, has begun implementing plans for expanding into markets in ASEAN, such as Kalimantan, Indonesia and Manila, the Philippines.
The company’s group managing director Datuk Sri Victor Hii Lu Thian said in view of the high population density and rapid infrastructure development in these markets, there are many opportunities for ASTEEL’s products and services to meet the needs of these countries.
ASTEEL is one of the leading building material solution providers in Sarawak and Sabah.
“Through ASTEEL Group, YKGI secured a number of projects, including an oil and gas project worth RM12 million, some housing projects and Sekolah Daif (dilapidated school upgrading) projects valued at over RM30 million.
“As part of our expansion plan, ASTEEL group also introduced more Envio Concept Stores (ECS) close to home in Sarawak and Sabah to serve the needs of Malaysians.
“In order to satisfy the demographic needs of our clients, one of our unique selling propositions is to produce and supply high quality products at competitive prices,” said Hii in the company’s 2022 annual report.
YKGI’s core principle is to provide building materials, and with its expertise, it aims to be a one-stop building solution provider.
It is principally involved in the manufacturing of coated steel products and processing of metal roofing, wall cladding & fencing, metal floor decking, light gauge structural components, purlins and framing systems under the brands of ASTEEL & ASTAR.
The group is also involved in the trading of building materials, both steel and non-steel components.
Since 2017, the group has also been involved in design, supply and installation of roofing system in construction projects. This segment has grown over the years and is now contributing 19 per cent to the group’s revenue, according to the company management.
YKGI, through its subsidiary companies, has a network of factories in Sarawak, Sabah, Selangor and Johor which manufacture metal roofing systems, metal frame, structural and architectural products as well as light-weight channel products. The coated steel products are manufactured in Kuching and distributed through the group’s networks.
YKGI group has a joint venture business collaboration with Ajiya Bhd on the processing and trading of tempered and laminated safety glass in Sarawak. The joint venture also produces industrial building system (IBS).
Hii said the group invested in research & development (R&D) projects with academic and industry partners in order to maintain its position as one of the leading brands in the region.
The move, he added, is to ensure that the group continuously delivers innovative and affordable products. In 2023, the group aims to introduce more products into the market.
“In addition, YKGI has increased its efforts to implement smart manufacturing in order to keep up with the times. In accordance with the group’s aims to fully optimise resources and maximise output through productivity and efficiency development, a continuous digitalisation process is taking the group to the next level.
“In line with this, the group has also increased its upskilling and reskilling efforts to equip its talent pipeline with skills to remain resilient,” he added.
Hii said the first group of ASTEEL senior leaders, through a collaboration with Universiti Malaysia Sarawak (Unimas), earned their Executive Masters in Leadership last year as part of the group’s succession plans. Operators also attended certification programme to upgrade their knowledge and skills in support of ASTEEL’s transformation and digitalisation efforts.
Reviewing the group’s financial performance in FY2022, Hii said it recorded total revenue of RM276.7 million (FY2021: 243.7 million) or an increase of RM33 million or 13.5 per cent.
He attributed the increase to higher selling price of the roofing products and higher sales volume from the engineering services and projects undertaken.
Despite the expanded revenue, he said the group fell into the red with pre-tax loss of RM4.58 million in FY2022 (+RM11.5 million).
“The adverse change was due to depressed gross margin mainly caused by sudden steel price reduction. In the second half of 2022, macro factors such as rising interest rate, high inflation, increasing labour cost after increase of minimum wage by 25 per cent, increasing energy price, Ukraine war, has caused the market to slow down.
“The below-target revenue achievement in second half year also averaged down the profit margin which resulted in losses,” he explained.
During the year under review, the group opened a new branch in Lahad Datu, Sabah to serve the market needs. With this addition, the group now has nine concept stores cum factories and four business outlets in East Malaysia, three factories and one concept store in Peninsula Malaysia. In 2022, the group achieved another milestone by taking its first step into the installation of equipment for the oil and gas industry in Bintulu.
Hii said despite the slow pace of economic recovery, YKGI was able to get through a difficult year in 2022.
“Looking ahead, I am optimistic that we will work harder to generate strong revenue growth and increase shareholder value despite the global economic slowdown and impending recession,” said Hii.
