PETALING JAYA: With healthy cash holdings of about RM40mil, Techbond Group Bhd is looking to beef up its operations, of which Vietnam and Malaysia will be its core markets to spur the group’s bottom line growth.

       Overseas sales account for more than 75% of the industrial adhesive and sealant manufacturer’s total revenue and Vietnam is the largest market.

       Commenting on its Vietnam operations, the group’s deputy managing director Lee Seh Meng told StarBiz: “Our game-changing upstream polymerisation plant in Vietnam is slowly picking up pace.

       “Thirty per cent of the capacity is allocated for our internal use while 40% of the capacity will be used to develop new types of industrial adhesives with the remaining 30% allocated to be sold to external customers.

       “The group has been meeting with potential customers on the supply of polymer and garnered positive feedback.

       “Overall, we continue to be excited about our polymerisation plant as it would provide us cost savings. Coupled with the tax incentives in Vietnam, our bottom line will improve going forward,” he added.

       He said the group’s healthy cash holdings as at end-December 2021, would enable Techbond to seize opportunities that may arise.

       According to him, the group is on the lookout for investment opportunities that are synergistic to its business and contribute positively to its earnings moving forward.

       Last year, it acquired a 4,803-sq m property comprising an office and factory located adjacent to its existing facility in Shah Alam for RM11.9mil.

       He said the property would be used for the group’s future capacity expansion.

       In the meantime, the property has been tenanted and would contribute a recurring rental income, said Lee.

       To a question on whether the appreciation of the US dollar against the ringgit would impact Techbond’s business, he said: “Techbond’s products are distributed to more than 15 countries and more than 75% of our revenue is derived from overseas markets.

       “Therefore, the appreciation of the greenback against the ringgit should benefit us. While this is positive for us, our focus remains on expanding our business and delivering growth,” he pointed out.

       He said the rising costs of raw materials, logistics as well as the shortage of some products would pose a challenge.

       However, the situation is manageable as the group is working closely with its customers to resolve the issue, according to Lee.

       Additionally, Techbond is mitigating the issue by continuously improving its efficiency and minimise the impact of the rising costs.Going forward, Lee is optimistic about recording better results.

       For the second quarter ended Dec 31, 2021, Techbond’s net profit rose marginally by 1.4% to RM2.59mil, while revenue was lower at RM22.59mil compared with RM23.71mil previously.

       On dividend payouts, he said Techbond had declared a total dividend of RM5mil in FY21, which represented a 43.5% payout based on FY21 net profit.

       This had exceeded its dividend policy of distributing up to 30% of net profit.

       “Looking ahead, the prospects of the group continue to be positive as our growth plans are charting good progress on the back of the economic recovery.

       “At the same time, we are cognisant of the demanding business operating landscape as well as uncertainties in the market.

       “Nevertheless, we have the support of our lean and healthy balance sheet to navigate through the obstacles ahead and facilitate our expansion plans,” Lee added.