Higher contribution from Indonesia expected


GEORGE TOWN: UNIMECH GROUP BHD expects the contribution from its Indonesian operations to reach 30% of the group’s revenue in 2022.

Currently, Indonesia generates around 27% of its income.

Unimech currently has nine warehouses and 45 branches in Indonesia supplying industrial valves for its palm oil industry.

The group also recently started operations at its manufacturing plant for valves for the maritime industry.

The group’s executive director, YF Sim, told StarBiz that the growth of the palm oil and marine industries will boost Indonesia’s contribution.

“Indonesia’s production is estimated at 48 million tonnes in 2021, up two million tonnes from the previous year.

“It is expected to climb to 49.5 million tonnes in 2022.

“The demand for palm oil has rebounded since April 2021, resulting in high prices for vegetable oils and contributing to food price inflation in various markets around the world,” he said.

Unimech valves are used in the production of crude palm oil (CPO) and palm kernel oil.

Unimech valves are used in the production of crude palm oil (CPO) and palm kernel oil.Unimech valves are used in the production of crude palm oil (CPO) and palm kernel oil.

“An increase in production results in increased sales of our valves,” Sim said.

Sim said the Indonesian government’s commitment to the B30 program will increase biodiesel consumption to 9.2 million tonnes. This equates to eight million tonnes of CPO.

The group’s West Java valve production plant, which recently started operations, will benefit from the Indonesian government’s plan to expand the capacity of its domestic shipping industry by 85,000 deadweight tons (DWT), Sim says. in 2015 to 300,000 DWT by 2025.

“Indonesia’s Investment Coordination Council (BKPM) wants to develop the country’s shipping industry, which is estimated at $ 20 billion (RM 84.37 billion).

“The board said the industry has a multiplier effect capable of stimulating growth in other sectors of the economy and creating jobs.

“The potential of the shipping industry is huge – the demand for ships not only for freight, but also for passenger ships, ferries, fishing boats, etc.,” Sim said.

He added that Indonesia aims to expand its knowledge and improve its national design capacity through its national naval engineering companies.

“Therefore, Indonesian maritime players should continue to improve their capabilities and build more specific classes of ships, including the Korvet, the frigate, cruise ships, liquefied petroleum gas carriers and liquefied natural gas carriers. “, did he declare.

Sim said that in 2020, the Indonesian market remains the group’s largest overseas market, contributing RM67.64 million or 26.1% of the group’s total revenue.

“Due to the pandemic, the Indonesian contribution is expected to remain stable in 2021.

“However, we can expect the contribution to reach around 30% in 2022,” he said.

The group expects to deliver around 290 million RM of industrial valves, fittings, pumps and instruments to its overseas and domestic customers this year, up nearly 10% from 2020.

“So far this year, we have delivered over 210 million RM of products.

“Our sales and profit before tax for 2021 will be much better than in 2020, based on profit before tax for the third quarter, which is almost equivalent to sales for 2020. Profit before tax for the nine first months increased 16% from a year ago, ”he said.