More negative impact expected from virus outbreak

PETALING JAYA: More negative impact from the coronavirus outbreak is expected to materialise in the coming weeks as factories in China have stopped running for a longer period than expected, according to BSL Corp Bhd CEO Richard Ngiam Tee Wee (pix).

He highlighted the possibility of migrant workers not returning to work on Feb 10, the day Chinese factories are due to start operation, which might translate into a bigger impact.

“When the Chinese factories stop producing, this will affect those who purchase parts from them,” he told SunBiz after the group’s AGM yesterday.

“This might not be an issue for us as we do not source much materials and components from China, but it might affect our customers that source materials and components from China, which is our biggest concern relating to the outbreak,” he added.

BSL is involved in the stamping and printed circuit board assembly as well as renewable energy.

For 2020, Ngiam is hoping that the groundwork laid down in the past few years for the transition into contract manufacturing from its traditional component business will pay off.

“This year, we hope to see some contribution from the contract manufacturing division, as our traditional business remains highly competitive and open to a lot of headwinds, from the coronavirus to weakness in the world economy.”

On the other hand, he said the group is ready to move forward with more jobs in the renewable energy sector, including in overseas markets such as Vietnam, as the experience gained and feedback from its customers have been positive.

Ngiam shared that one of the main hurdles for its operations in the segment is the need for financing for its customers.

“We found that customers like the net metering we offer, but some of them might need to secure financing before it can go through with the project.”

However, he said BSL is taking a backseat on the property venture as the current market is soft.

“It is not the right time to go into property, hence we are adopting a keep- and-wait attitude first and will re-evaluate our intention in this field in the next 12 months.”

Meanwhile, the group has expressed optimism with regard to its ongoing legal appeal at the Court of Appeal against the RM11.13 million slapped against it by Royal Malaysian Customs, Selangor. It includes the import duty and sales tax charges of RM6.49 million and RM4.64 million each for the period of December 2011 to July 2014.

“In our opinion, we do have a strong case, nevertheless the outcome will depend on the court and judge,” said Ngiam.

For the first quarter ended Nov 30, 2019, BSL swung to the red registering a net loss of RM297,000 against a net profit of RM1.56 million, due to higher cost of production, lower sales and the absence of forex gain recorded in the previous corresponding period.

Source: TheSunDaily