Chin Well upbeat about demand for fasteners from US, Europe
By DAVID TAN , 2013-11-28 12:00:00
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More orders: Industrial product and construction material wholesalers in the U.S. are turning to Chin Well to source mild steel fasteners.
Chin Well Holdings Bhd expects to sell more fasteners in 2014 due to demand from the United States and Europe.
Group director Tsai Chi-yun told StarBiz that industrial product and construction material wholesalers in the United States were now turning to Chin Well to source mild steel fasteners.
“Previously, they had bought from India and Thailand. But with the recent anti-dumping duties imposed on threaded rods, a type of fasteners, from India and Thailand, they are now coming to us.
“We expect steady demand from these buyers for the next five years,” she added.
On sales to Europe, the group will be getting more CE (European Conformity) certifications for different ranges of fasteners used in government projects.
“The sales contribution from Europe for the 2014 fiscal year is expected to improve over to 40% of the group’s revenue compared to 35% a year ago.
“The market in Malaysia and the region, however, has slowed down due to the weakening Asian currencies such as the Thai baht and the Indian rupee.
“Intense competition from China-made fasteners has also exacerbated the situation.
“The Malaysian and Asian market, which contributed about 30% to group revenue in the 2013 fiscal year ended June 30, is expected to generate less than 25% for the 2014 fiscal year,” she added.
The orders from the United States and Europe would raise the monthly output of fasteners by 15% to 20% from the production plant in Bukit Minyak, which currently produces about 4,000 tonnes of fasteners per month, according to Tsai.
For the 2013 fiscal year, the group’s output of fasteners and wire harness products remained flat at about 107,762 tonnes, more or less the same as the 2012 production figure, Tsai added.
“About 70% to 75% of the 107,762 tonnes comprised fasteners, which are higher-value products, while the remainder came from the wire harness business.
“There are plans to produce higher-value wire harness products next year,” she added.
According to The Freedonia Group, an industry market research firm, global fastener sales are expected to rise by 5.2% yearly to US$82.9bil (RM266bil) in 2016.
The report said the Asia-Pacific region would record the fastest demand gains from 2011 to 2016, averaging 7.4% a year, driven by the strong China market, which would advance at a rapid pace despite moderating from the 2006-2011 rate.
According to Fastener Industry News (FIN), a printed media and online fastener portal, in 2011, the motor vehicle original equipment manufacturing was the largest market for industrial fasteners, and this market is expected to post the largest value gains through 2016.
“Also, accelerations in manufacturing output and fixed investment spending will lead to increased demand for fasteners used in machinery, countered by intensifying competition from alternative joining technologies such as adhesive, restraining fastener sales increases in some market segments.
“The Asia-Pacific region will record the fastest demand gains from 2011 to 2016, averaging 7.4% per year,” the FIN report added.
