Denko Industrial Corporation Berhad (Denko - 8176) had acquire PT Winsheng Plastic and Tooling in Indonesia as part of the group restructuring and diversification exercise in order to see higher revenue and profit. PT Winsheng Plastic and Tooling specialized in sophisticated plastic injection moulding and mould fabrication.
The expansion exercise to set up a plant in Jakarta, Indonesia resemble Denko first footprint outside Malaysia. According to group CEO Tan Chen Wei, the expansion into Indonesia is to create greater value among existing MNC client that had relocated to Indonesia.
According to Allied Market Research, the injection moulded plastic market is expected to reach USD 162 billion by Year 2020. The research project a CAGR of 4.9% from 2015 to 2020, with most of the growth focusing in the packaging of end user segment. On a regional basis, Asia Pacific will be the leading market in terms of consumption and revenues.
The application for plastic injection mould continue to grow wider, replacing heavier metal to plastic. The Automotive Industry is one of one the prime example on how plastic had been replacing heavier metal car parts. This in turn had influence on how all the products are manufactured.
The growing prospect in this plastic moulding industry couldn't be captured more timely by Denko. Currently, Denko's customer based comprises of MNC from automotive, consumer electric, information technology and industrial product sector. Prominent leading names such as Dyson, JVC Kenwood, Pioneer, Panasonic and Schneider Electric had been core clientele for Denko plastic mould injection operation.
Denko consolidation could be looking for a successful
breakout above RM 0.38 after several previous attempts.
According to familiar sources in the industry, Denko's establishment in Indonesia will continue to grow stronger as it is looking to become a turnkey contractor, manufacturing final products for clients. With much of the consumer electric giants closing down manufacturing plant and restructure operation, including outsourcing manufacturing of final product, this is a huge window of opportunity for turnkey contractor such as Denko. Playing along this line could be seeing Panasonic being the first few client to appoint Denko for their final product production after the closure of a factory in February this year.
Indonesia is going to be a huge growing business arena as President Joko Widodo open up 35 sector for 100% foreign ownership. Indonesia had on last year drawing in more than USD 30 billion of foreign direct investment.
Consumer electronics had been the prime pushing factor for plastic injection mould industry. Demand will continue to see pick up in Asia Pacific country, especially in new emerging market nation such as Vietnam and Myammar.
Denko is committed and positive in seeing it's revenue for FYE 2016 going past RM 100 million with annual profit of more than RM 5 million. This diversification will resemble the primary path of Denko growing potential and wealth in the future.
The future of plastic injection mould industry is bright. Advance technology in resin material, improved automation and factory connectivity all point to a bright future for plastic manufacturing, and Denko will definitely be one of the pioneer in this great movement.
DENKO (8176) - Denko Industrial Corporation Berhad : Changing Tale of Plastic
http://bonescythe.blogspot.my/2016/04/denko-changing-tale-of-plastic.html
