GEORGE TOWN: EG Industries Bhd, an electronics manufacturing services provider, is eyeing a 30 per cent revenue contribution from its box-build segment for the financial year ending June 30, 2017.
The company’s group chief executive officer and executive director Alex Kang said in the past two years, EG had been increasingly entrusted with the full scope of manufacturing customers’ products, as reflected in the steady uptrend of sales in the box-built segment.
Box-build refers to end-to-end manufacturing services, from designing to shipping of completed products to customers’ end users.
Kang said that undertaking box-build was part of the group’s strategic shift to move up the value chain from printed circuit board assembly (PCBA), thereby achieving a higher-margin product mix.
“We are gaining the confidence if not only existing customers but also growth-centric new clients. With estimated order book of RM250 million to be delivered in the 2017 financial year, we believe that the revenue contribution target of 30 per cent from box-build is attainable,” he said in a statement after the company’s annual shareholders’ meeting in Sungai Petani, Kedah.
For the past two years ending June 30, EG successfully grew its box-build segment from RM63.6 million in its 2015 financial year to RM128.3 million in its 2016 financial year, making up 10 per cent and 18 per cent of group revenue, respectively.
“Our new production facility in Sungai Petani,” added Kang, “increased our overall capacity by 20ercent, positioning us favourably for future prospects. It is currently operating at 35 percent utilisation, thereby providing us enough room to expand our scope of services, particularly end-to-end box-build services.”
Kang added that EG would continue exploring opportunities to move up the EMS value-chain, leveraging on its strategic location in the distribution hub in Malaysia to grant international customers access into the Southeast Asian market of more than 600 million population.
“Moving forward we wish to take our partnership with customers a step further to distribute their products in Southeast Asia. This would be EG’s further value-add to customers, by enabling them make to inroads into this large and increasingly-affluent market.
“In this way, EG would strengthen our position as a one-stop vertically-integrated EMS provider to international clientele,” he said.