KUALA LUMPUR: SMTrack Bhd is bullish that 2015 will be the turning point for the loss-making company, lifted by its recent ventures in China and the United States.
SMTrack ventured into traceability businesses in China and the US in May and this month, respectively, and its chief executive officer Yow Lock Sen said this should help it return to the black next year.
The company expects to see up to 90 per cent of its revenue from overseas operations by then, which may include another “big” project in Saudi Arabia, to be announced soon.
“Next year is going to be the turning point for us. I’m very excited and confident that these new businesses that we are working on right now will boost the profitability of SMTrack,” Yow said at a briefing, here, yesterday.
SMTrack on Tuesday announced that it had teamed up with two Americans to fast-track its core traceability business in designing and commissioning an embedded traceability bottling plant in the US.
The deal will see Michael Maragh and Marc Thomas transferring 100 per cent and 75 per cent of their shares in MRH Capital Inc and California Bottling Co Inc (CBC), respectively, to SMTrack.
This will be in exchange for a total of 40 million new shares in Smartag International Inc, a 94.01 per cent owned US subsidiary of SMTrack.
“SMTrack is seeking to raise about US$6.2 million (RM20.4 million) for working capital and expansion plans of the enlarged beverage business. We are considering all options, including equity,” he said.
“The project is expected to have a sustainable margin and between 20 and 25 per cent internal rate of return in the long run,” Yow added.
In China, SMTrack is developing a cross-border end-to-end food traceability system for its Chinese partners, namely Institute of Digital Guangdong and Canton Fair Import and Export Co Ltd (Canton Fair).
The partnership will provide a specialised online food traceability linkage that enables food exporters outside of China, such as Malaysia, to associate with their supply chain and logistics systems.
“Malaysian producers would have direct linkages via SMTrack’s food traceability platform to their partners in Southern China,” he said.
On its project in Saudi Arabia, the company expects to close the deal either by year-end or in the first quarter of next year.
Yow did not disclose further details on the deal, but said it is for the operation of secured-tracking fleet management services for a “major oil and gas player” that is linked to the Saudi Arabia government.