KUALA LUMPUR: Main market-listed plastics pipes, water tanks and fittings manufacturer Resintech Bhd is poised to benefit from Malaysia's government's push to modernise the water piping landscape and overhaul the piping infrastructure under the 12th Malaysia Plan (12MP).
Managing director Datuk Dr Teh Kim Poo said the national reinvigoration of water piping infrastructure and the aggressive targets to curtail non-revenue water (NRW) rates present an exciting opportunity for Resintech.
"As key contributors to this infrastructural shift, we anticipate significant earnings growth in the ensuing years," he said in a statement today.
Under the 12MP framework, the government has outlined a comprehensive agenda for pipe replacement programs.
This ambitious initiative aims to significantly reduce NRW from 34 per cent in 2020 to 25 per cent by 2025.
This effort is particularly critical given that an estimated 70 per cent to 75 per cent of current NRW is attributed to leaks, pipe bursts, and damaged fittings.
As Malaysia's largest high-density polyethylene (HDPE) pipe manufacturer, Resintech has positioned itself to receive around RM15 million in HDPE pipe orders from Pengurusan Aset Air Bhd (PAAB).
This reflects the company's role in the nation's water infrastructure augmentation.
To date, Resintech is operating at 80 per cent of its capacity for manufacturing HDPE pipes.
With such strong demand, the company is also exploring opportunities to expand capacity and install new machines across its seven factories—two located in Selangor, two in Sabah, two in Sarawak, and one in Indonesia.
"Our remarkable performance in securing contracts and the subsequent financial uplift showcase Resintech's resilience and capability in navigating a competitive landscape.
"We are well-positioned to leverage the burgeoning opportunities arising from the national infrastructure overhaul," Dr Teh said.
On earnings, Resintech achieved 19.3 per cent year-on-year (YoY) growth of RM25.2 million for the first quarter (Q1) ended June 30, 2023 (FY23), while net profit was RM1.3 million, more than doubling from RM0.54 million in Q1 FY22.
According to Dr Teh, the strong earnings reflect the rising demand for the company's products.
He said that with a strong foothold in the industry and a track record of success, Resintech is poised to contribute significantly to Malaysia's infrastructural progress and achieve sustained growth and value creation for its stakeholders.