Ekowood to Increase Malaysian Plant Capacity

Gopeng, Malaysia, June 20, 2007--Ekowood International Bhd, which manufactures engineered solid hardwood flooring, is embarking on a RM18 million to RM20 million expansion to raise capacity at its Gopeng plant by 80 per cent to meet rising demand.

“Architects are crying out for new designs, consumer lifestyles are becoming more sophisticated while volumes sales are growing at 15 per cent annually,” said chief executive officer Tan Aik Sim.

Ekowood will raise capacity to 2.3 million square metres from 1.5 million square metres annually, given rising demand from Europe as well as Malaysia and new growth markets such as the Middle East and Asean.

“We will fund the expansion from internally-generated funds,” he told reporters after the company’s 13th annual general meeting in Kuala Lumpur today.

While Europe accounted for 55 to 60 per cent of revenue, Malaysia’s share was rising significantly and projected to increase from 17 per cent to 20 per cent this year and thereafter to 25 per cent in the next few years, Tan said.

The remaining contribution came from the US, the Middle East and South-East Asia, all potentially lucrative markets, he said.

Tan said the Gopeng plant would be running at full capacity in three to four years.

With flooring prices having gone up, Ekowood’s products are seen to be more affordable, according to him.

“We have a lot of projects in hand and an order book of eight to nine million square metres,” he said of Ekowood, which is a subsidiary of TSH Resources Bhd.

For 2006, Ekowood recorded a higher group pre-tax profit of RM19.7 million from RM14.54 million the previous year on a turnover of RM153.73 million against RM131.56 million previously.