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Thursday, April 3, 2008

UAC counts on new system to push sales

KUALA LUMPUR: Cellulose fibre cement board manufacturer UAC Bhd, whose earnings has been slightly affected by high raw material costs, is focusing on new and innovative products and improving productivity to mitigate rising costs.

Chief executive officer Koo Hock Fee said UAC would focus on its UCO SolidWall system, which would reduce to only one-third the time taken to put up a wall compared with a brick and plaster wall.

Koo Hock Fee

The product would translate into cost savings because of the shorter time involved, he said, adding that the company would hold a series of seminars nationwide this month to market it to property developers.

Speaking after the company AGM yesterday, Koo said 2007 had been challenging as the prices of raw materials such as pulp and cement had risen 10% and 12% respectively since December 2006, amid weak domestic demand.

The group also recently moved to Menara UAC, its new corporate office, in Mutiara Damansara, Selangor. The building, with a net lettable area of 138,000 sq ft, would provide the group with an additional income stream and potential capital appreciation.

Khoo said the tenancy of 46% of the building was already confirmed while 36% was under negotiation.

“We are reasonably confident that the office will be fully tenanted by year-end,” he said, adding that the expected rental yield was 9% while the return on capital 6.5%.

UAC registered a lower pre-tax profit of RM27.2mil on turnover of RM165.5mil for its financial year ended Dec 31, 2007. Net profit came in at RM22.6mil, down from RM30.9mil in 2006.

By The Star

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