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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

High-end properties still attracting foreigners

MALAYSIA'S property sector will continue to attract foreign investors, especially the high-end segment, despite the recent changes in the local political landscape, Asian Strategy & Leadership Institute (ASLI) chief executive officer Datuk Dr Michael Yeoh said yesterday.

However, the foreign investors are bound to adopt a “wait and see” attitude for now until the political scenario is much more clearer, he said.

The wait-and-see attitude is more likely to affect the high end properties that depend on foreign purchases like those in the KLCC areas or those above RM2,000 per sq ft.

Presenting a talk in Kuala Lumpur yesterday on the “Impact of The Recent General Election on the Real Estate Industry”, organised by the International Real Estate Federation Malaysia (FIABCI-Malaysia), Yeoh said a more clearer political picture was expected after the UMNO General Assembly in December and this will result in a relatively more stable property market.

He, nevertheless added there was no sign yet of a slowdown in the foreign investments.

Whatever the changes, the basic policies are expected to remain same, he said, adding that the local property market will continue to be boosted by domestic demand.

“I dont think domestic demand would slow down, I think that would continue to be strong,” he added.

Yeoh also said a more influencing factor was the global economic situation rather than Malaysian politics as the US subprime crisis was far from over and that it may have impact on global liquidity.

On a positive side, he said Malaysian economy was well preserved by domestic consumption which was robust.

ASLI has forecast a gross domestic product growth of between 5.8 per cent and 6.2 per cent this year amid robust domestic demand, and exports of its oil and gas and palm oil.

Meanwhile, Glomac Bhd’s group executive vice chairman, Datuk Richard Fong, was also upbeat on the high-end property market. He said: “I think the property sector will remain stable and we will see a surge of foreign investments for properties especially in the high-end market, mainly from the Middle East.”

Bukit Kiara Properties Sdn Bhd’s group chairman Datuk Alan Tong Kok Mau meanwhile said there was still a lot of growth potential for the high-end property market, saying that Malaysia’s property prices still remained very competitive.

“There is still a niche market for the high-end segment and we would focus on that. Towards the year, we would see demand mainly from the Middle East and China,” he said.

By Bernama

MPHB makes property thrust

MULTI-PURPOSE Holdings Bhd (MPHB) will use cash from the privatisation of its gaming subsidiary Magnum Corp Bhd to venture into property development in a bigger way, its top official said.

The move will provide the group with a new earnings stream as it seeks long-term growth, managing director Datuk Surin Upatkoon (pic) said.

He said MPHB, which stands to get up to RM731 million from the privatisation exercise, already has two hectares of prime land along Jalan Sultan Ismail in Kuala Lumpur on which it is planning a commercial development.

The group expects to obtain the planning approval for it by year-end. It also wants to increase its landbank in Malaysia and has the first right of refusal to buy land owned by Magnum.

"It's still premature to say how much of the proceeds we'll use for property development, (but) it'll be one of our core businesses and will start contributing to the group from 2009 onwards," Surin told reporters after shareholders gave their approval for the privatisation yesterday.

The Magnum buyout, which MPHB is undertaking with global private equity firm CVC Capital Partners Asia III Ltd, is expected to be completed by June this year, he said.

MPHB is now on the brink of a growth phase after successfully cutting debt to some RM200 million today from a peak of over RM2 billion about five to six years ago.

It derives the bulk of its earnings from gaming, but also does insurance and stockbroking.

Surin expects MPHB to do well this fiscal year but warned that it will probably not be able to match last year's strong performance, where net profit more than quadrupled to RM571 million.

Shareholders can nevertheless expect to get a higher dividend than the 11 sen a share that was declared last year, he said.

The gaming business is expected to grow by between three per cent and 3.5 per cent this year, while insurance is targeted to grow by about 14 per cent to RM320 million.

The group may sell its insurance business if a good offer comes by, Surin said. It is currently in talks with a local insurance firm which has a foreign shareholder.

"We're not in a hurry to dispose it. We could also go for a merger," he remarked.

As for gaming, the group has no plans to expand into the region as yet. It has been "business as usual" in states like Kedah where the opposition Islamic political party recently wrested control.

By New Straits Times (by Adeline Paul Raj)

MMC-Gamuda rail project to create 150,000 jobs

ABOUT 150,000 jobs will be created under the RM12.5 billion electrified double-tracking railway project over the next five years.

The main contractor, an MMC Corp Bhd and Gamuda Bhd joint venture, expects the project, which involves laying parallel railway lines over 329km from Ipoh to Padang Besar, to be completed on time in 2013.

About five per cent of the project has been done.

"In addition to hiring 5,000 professionals and 12,000 sub-professional staff, the project will also see over 100,000 skilled and unskilled workers engaged," MMC-Gamuda JV director Datuk Azmi Mat Nor told a media briefing in Bukit Mertajam, Penang, yesterday.

He said since the company took possession of the sites across Perak, Penang, Kedah and Perlis on January 8, work has been on schedule.

MMC-Gamuda will brief the state governments and local authorities on the progress of the project in their respective states and its benefits.

The infrastructure works in the four northern states include over 196km of railway tracks, stations, depots, halts, yards and bridges, while the system works comprise the relocation of existing services, electrification systems, signalling and communication systems.

MMC-Gamuda has given out RM3 billion worth of construction packages.

"Of the total, up to RM1.6 billion has been awarded to Bumiputera contractors that fulfilled three main criteria of being genuine and having hands-on management experience, capable contractors that have positive track records for both financial and technical, and able to offer competitive pricing via a tender system," Azmi added.

By New Straits Times (by Marina Emmanuel)