MIRA INFORM REPORT

 

 

Report Date :

17.10.2012

 

IDENTIFICATION DETAILS

 

Name :

BEKAERT SOUTHERN WIRE SDN. BHD.

 

 

Formerly Known As :

BERJAYA KAWAT MANUFACTURING SDN BHD

 

 

Registered Office :

2723, Lorong Perusahaan 12, Prai Industrial Estate, Level 3, 13600 Prai, Pulau Pinang

 

 

Country :

Malaysia

 

 

Financials (as on) :

30.06.2011

 

 

Date of Incorporation :

08.01.1980

 

 

Com. Reg. No.:

53945-H

 

 

Legal Form :

Private Limited Company

 

 

Line of Business :

Manufacture & sale of steel wire, wire ropes, tyre bead wire, welding wire, galvanised wire & strand

 

 

No. of Employees :

750 [2012]

 

RATING & COMMENTS

 

MIRA’s Rating :

Ba

 

RATING

STATUS

PROPOSED CREDIT LINE

41-55

Ba

Overall operation is considered normal. Capable to meet normal commitments.

Satisfactory

 

Status :

Satisfactory

Payment Behaviour :

No Complaints

Litigation :

Clear

 

NOTES:

Any query related to this report can be made on e-mail: infodept@mirainform.com while quoting report number, name and date.

 

ECGC Country Risk Classification List – June 30th, 2012

 

Country Name

Previous Rating

(31.03.2012)

Current Rating

(30.06.2012)

Malaysia

 A2

A2

 

Risk Category

ECGC Classification

Insignificant

 

A1

Low

 

A2

Moderate

 

B1

High

 

B2

Very High

 

C1

Restricted

 

C2

Off-credit

 

D

 

malaysia - ECONOMIC OVERVIEW

 

Malaysia, a middle-income country, has transformed itself since the 1970s from a producer of raw materials into an emerging multi-sector economy. Under current Prime Minister NAJIB, Malaysia is attempting to achieve high-income status by 2020 and to move farther up the value-added production chain by attracting investments in Islamic finance, high technology industries, biotechnology, and services. The NAJIB administration also is continuing efforts to boost domestic demand and reduce the economy's dependence on exports. Nevertheless, exports - particularly of electronics, oil and gas, palm oil and rubber - remain a significant driver of the economy. As an oil and gas exporter, Malaysia has profited from higher world energy prices, although the rising cost of domestic gasoline and diesel fuel, combined with strained government finances, has forced Kuala Lumpur to begin to reduce government subsidies. The government is also trying to lessen its dependence on state oil producer Petronas. The oil and gas sector supplies more than 40% of government revenue. The central bank maintains healthy foreign exchange reserves, and a well-developed regulatory regime has limited Malaysia''s exposure to riskier financial instruments and the global financial crisis. Nevertheless, Malaysia could be vulnerable to a fall in commodity prices or a general slowdown in global economic activity because exports are a major component of GDP. In order to attract increased investment, NAJIB has raised possible revisions to the special economic and social preferences accorded to ethnic Malays under the New Economic Policy of 1970, but he has encountered significant opposition, especially from Malay nationalists and other vested interests.

 

Source : CIA

 

 


* Adopted abbreviations :

SC - Subject Company (the company enquired by you)

 

 

 

N/A - Not Applicable

 

 

 

EXECUTIVE SUMMARY

 

REGISTRATION NO.

:

53945-H

COMPANY NAME

:

BEKAERT SOUTHERN WIRE SDN. BHD.

FORMER NAME

:

BERJAYA KAWAT MANUFACTURING SDN BHD (14/06/1993)
BERJAYA KAWAT (COATED WIRES) SDN BHD (08/05/1986)
BERJAYA KAWAT-AWI (COATED WIRES) SDN BHD (24/05/1984)
SOUTHERN WIRE INDUSTRIES (MALAYSIA) SDN BHD

INCORPORATION DATE

:

08/01/1980

 

 

 

 

 

 

COMPANY STATUS

:

EXIST

LEGAL FORM

:

PRIVATE LIMITED

LISTED STATUS

:

NO

 

 

 

 

 

 

REGISTERED ADDRESS

:

2723, LORONG PERUSAHAAN 12, PRAI INDUSTRIAL ESTATE, LEVEL 3, 13600 PRAI, PULAU PINANG, MALAYSIA.

BUSINESS ADDRESS

:

NO 7 JALAN UTAS 15/7 SECT 15, 40200 SHAH ALAM, SELANGOR, MALAYSIA.

TEL.NO.

:

03-55191501

FAX.NO.

:

03-55193369

EMAIL

:

swi@s-wire.com

WEB SITE

:

www.s-wire.com

CONTACT PERSON

:

KHOR SIEW KHIM ( CREDIT CONTROLLER )

 

 

 

INDUSTRY CODE

:

28992

PRINCIPAL ACTIVITY

:

MANUFACTURE & SALE OF STEEL WIRE, WIRE ROPES, TYRE BEAD WIRE, WELDING WIRE, GALVANISED WIRE & STRAND

AUTHORISED CAPITAL

:

MYR 15,000,000.00 DIVIDED INTO 
ORDINARY SHARE 15,000,000.00 OF MYR 1.00 EACH.

ISSUED AND PAID UP CAPITAL

:

MYR 13,685,000.00 DIVIDED INTO 
ORDINARY SHARES 3,250,000 CASH AND 10,435,000 OTHERWISE OF MYR 1.00 EACH.

 

 

 

SALES

:

MYR 517,032,000 [2011]

NET WORTH

:

MYR 66,890,000 [2011]

M1000 OVERALL RANKING

:

709[2004]

M1000 INDUSTRY RANKING

:

17[2004]

 

 

 

STAFF STRENGTH

:

750 [2012]

BANKER (S)

:

RHB BANK BHD

LITIGATION

:

CLEAR

DEFAULTER CHECK

:

CLEAR

FINANCIAL CONDITION

:

POOR

PAYMENT

:

AVERAGE

MANAGEMENT CAPABILITY

:

AVERAGE

 

 

 

COMMERCIAL RISK

:

LOW

CURRENCY EXPOSURE

:

MODERATE

GENERAL REPUTATION

:

GOOD

INDUSTRY OUTLOOK

:

AVERAGE GROWTH

 

HISTORY / BACKGROUND

 

The SC is a private limited company and is allowed to have a minimum of one and a maximum of forty-nine shareholders. As a private limited company, the SC must have at least two directors. A private limited company is a separate legal entity from its shareholders. As a separate legal entity, the SC is capable of owning assets, entering into contracts, sue or be sued by other companies. The liabilities of the shareholders are to the extent of the equity they have taken up and the creditors cannot claim on shareholders' personal assets even if the SC is insolvent. The SC is governed by the Companies Act, 1965 and the company must file its annual returns, together with its financial statements with the Registrar of Companies.

 

The SC is principally engaged in the (as a / as an) manufacture & sale of steel wire, wire ropes, tyre bead wire, welding wire, galvanised wire & strand.

 

The SC is not listed on Bursa Malaysia (Malaysia Stock Exchange).

 

According to the Malaysia 1000 publication, the SC's ranking are as follows:

 

 

 

 

YEAR

2004

 

 

OVERALL RANKING

709

 

 

INDUSTRY RANKING

17

 

 

 

The immediate and ultimate holding company of the SC is SOUTHERN STEEL BHD, a company incorporated in MALAYSIA.

 

The major shareholder(s) of the SC are shown as follows :

Name

Address

IC/PP/Loc No

Shareholding

(%)

SOUTHERN STEEL BHD

2435, LORONG PERUSAHAAN 12, PRAI INDUSTRIAL ESTATE, 13600 PRAI, PULAU PINANG, MALAYSIA.

5283

13,585,000.00

99.27

STARGLOW INVESTMENTS LTD

 

 

100,000.00

0.73

 

 

 

---------------

------

 

 

 

13,685,000.00

100.00

 

 

 

============

=====

+ Also Director

 

The SC interest in other companies (Subsidiaries/Associates) are shown as follow :

Local No

Company

(%)

As At

 

328224

TREND STAPLES INDUSTRY SDN BHD

100

31/12/2011

 

 

 

 

 

 

196235

CEMPAKA RAYA SDN BHD

100

31/12/2011

 

 

 

 

 

 

55573

SOUTHERN PC STEEL SDN BHD

97

31/12/2011

 

 

 

 

 

 

 

 

DIRECTORS

 

DIRECTOR 1

 

Name Of Subject

:

MR. ANG MENG CHUAN

Address

:

1843A, TAMAN FOUR SEA, 71000 PORT DICKSON, NEGERI SEMBILAN, MALAYSIA.

IC / PP No

:

6721642

New IC No

:

620417-05-5339

Date of Birth

:

17/04/1962

 

 

 

Nationality

:

MALAYSIAN CHINESE

Date of Appointment

:

31/12/2009

 

DIRECTOR 2

 

Name Of Subject

:

DATO' DR TAN TAT WAI

Address

:

31, JESSELTON CRESCENT, 10450 PULAU PINANG, PULAU PINANG, MALAYSIA.

IC / PP No

:

0287514

New IC No

:

461116-07-5293

Date of Birth

:

16/11/1946

 

 

 

Nationality

:

MALAYSIAN CHINESE

Date of Appointment

:

05/07/1990

 

 

 

Qualification

:

BACHELOR OF SCIENCE DEGREE IN ELECTRICAL ENGINEERING AND ECONOMICS FROM THE MASSACHUSETTS INSTITUTE OF TECHNOLOGY, MASTER'S DEGREE IN ECONOMICS FROM THE UNIVERSITY OF WISCONSIN (MADISON) AND DOCTORATE IN ECONOMICS FROM HARVARD UNIVERSITY

Working Experience

:

HE IS CURRENTLY THE GROUP MANAGING DIRECTOR OF SOUTHERN STEEL BHD SINCE 1993. HE STARTED HIS CAREER WITH BNM UNDERTAKING RESEARCH IN ECONOMIC POLICIES. HE WAS APPOINTED AS THE CEO AS WELL AS A DIRECTOR OF SOUTHERN STEEL BHD, AND WAS CONCURRENTLY CONSULTANT TO BNM IN MAY 1984. HE ALSO WAS A CONSULTANT OF THE WORLD BANK AND THE UNITED NATIONS UNIVERSITY FOR SEVERAL YEARS. HE WAS APPOINTED AS THE MANAGING DIRECTOR OF SOUTHERN STEEL BHD IN SEPTEMBER 1990.

Other Info

:

HE IS CURRENTLY A MEMBER OF THE GOVERNMENT APPOINTED MALAYSIAN BUSINESS COUNCIL, PENANG INDUSTRIAL COUNCIL, THE INDUSTRIAL CO-ORDINATION COUNCIL (ICC) AND THE NATIONAL COMMITTEE ON BUSINESS COMPETITIVENESS (NCBC) SET UP BY THE MINISTRY OF INTERNATIONAL TRADE AND INDUSTRY. HE REPRESENTS MALAYSIA AS A MEMBER OF THE APEC BUSINESS ADVISORY COUNCIL (ABAC).

 

DIRECTOR 3

 

Name Of Subject

:

MR. TANG HONG CHEONG

Address

:

18, JALAN 5/1, 46000 PETALING JAYA, SELANGOR, MALAYSIA.

IC / PP No

:

4825153

New IC No

:

550627-10-5903

Date of Birth

:

27/06/1955

 

 

 

Nationality

:

MALAYSIA CHINESE

Date of Appointment

:

15/01/2010

 

 

 

 

 

 

Working Experience

:

HE HAS SERVED IN THE HONG LEONG GROUP OF COMPANIES SINCE 1976.

Other Info

:

HE OBTAINED FELLOWSHIP OF THE CHARTERED ASSOCIATION OF CERTIFIED ACCOUNTANTS, UNITED KINGDOM AND MEMBERSHIP OF THE INSTITUTE OF CHARTERED SECRETARIES AND ADMINISTRATOR, UNITED KINGDOM.



MANAGEMENT

 

1)

Name of Subject

:

KHOR SIEW KHIM

 

Position

:

CREDIT CONTROLLER

 

 

 

 

 

2)

Name of Subject

:

CHEAH YIN LIAN

 

Position

:

SALES MANAGER

 

 

 

 

 

3)

Name of Subject

:

VIVIAN CHAN

 

Position

:

GROUP HUMAN RESOURCE MANAGER

 

 

 

 

 

4)

Name of Subject

:

SASHIKUMAR

 

Position

:

HUMAN RESOURCE MANAGER

 

 

 

 

 

5)  Name of Subject  :  HELEN OH

     Position              :  PURCHASING MANAGER

                                

AUDITOR

 

Auditor

:

KPMG

Auditor' Address

:

WISMA PENANG GARDEN, 42, JALAN SULTAN AHMAD SHAH, 1ST FLOOR, 10050 PULAU PINANG, PULAU PINANG, MALAYSIA.

 

 

COMPANY SECRETARIES

 

1)

Company Secretary

:

MR. TING KOK KEONG

 

IC / PP No

:

A1870430

 

New IC No

:

710311-07-5197

 

Address

:

34, JALAN PERPADUAN, TAMAN ALMA, 14000 BUKIT TENGAH, PULAU PINANG, MALAYSIA.

 

 

BANKING


Banking relations are maintained principally with :

1)

Name

:

RHB BANK BHD

 

The SC enjoys normal banking routine with above mentioned banker(s). The SC has bank charges with above mentioned banker(s).

 

 

ENCUMBRANCE (S)


No encumbrance was found in our databank at the time of investigation. 

 

 

LEGAL CHECK AGAINST SC


* A check has been conducted in our databank againt the SC whether the subject has been involved in any litigation. Our databank consists of 99% of the wound up companies in Malaysia.

No legal action was found in our databank. 

No winding up petition was found in our databank. 

DEFAULTER CHECK AGAINST SC


* We have checked through the SC in our defaulters' database which comprised of debtors that have been blacklisted by our customers and debtors that have been placed or assigned to us for collection since 1990. Information was provided by third party where the debt amount can be disputed. Please check with creditors for confirmation as alleged debts may have been paid since recorded or are being disputed. 

No blacklisted record & debt collection case was found in our defaulters' databank. 

PAYMENT RECORD

 

SOURCES OF RAW MATERIALS:

 

Local

:

YES

Percentage

:

60%

Overseas

:

YES

Percentage

:

40%

 

 

 

 

 

 


The SC refused to provide any name of trade/service supplier and we are unable to conduct any trade enquiry. However, from financial historical data we conclude that :

 

OVERALL PAYMENT HABIT

Prompt 0-30 Days

[

 

]

 

Good 31-60 Days

[

 

]

 

Average 61-90 Days

[

X

]

 

Fair 91-120 Days

[

 

]

 

Poor >120 Days

[

 

]

 

 

 

 

 

 

 

CLIENTELE

 

Local

:

YES

Percentage

:

60%

Domestic Markets

:

MALAYSIA

Overseas

:

YES

Percentage

:

40%

Export Market

:

AUSTRALIA, NEW ZEALAND, SINGAPORE, UNITED STATES, MIDDLE EAST, ASIA

Credit Term

:

30 - 60 DAYS

 

 

 

 

 

 

Payment Mode

:

CHEQUES,TELEGRAPHIC TRANSFER (TT)

 

 

 

 

 

 

 

 

 

 

 

 

CUSTOMER(S)

:

1) UNIVERSAL CABLE (SARAWAK) SDN BHD

 

OPERATIONS

 

Products manufactured

:

GALVANISED STEEL STRANDS, GALVANISED STEEL WIRES, STEEL WIRE ROPES, STEEL WIRES, PRESTRESSED CONCRETE STEEL BARS, PRESTRESSED CONCRETE STEEL STRANDS, PRESTRESSED CONCRETE STEEL WIRES, ARC STEEL WELDING (MIG AND SUBMERGED), TYRE BEAD WIRESWIRE, MIG WELDING WIRE,SUBMERGED ARC WELDING WIRE

 

 

 

Award

:

1 ) MS ISO 9001 : 2000 Year :2003

 

 

 

 

Competitor(s)

:

ALPHA INDUSTRIES BHD
ELEKTRISOLA (MALAYSIA) SDN BHD
FUJIKURA (MALAYSIA) SDN BHD
SOUTH MALAYSIA INDUSTRIES BHD
SUMITOMO ELECTRIC WINTEC (MALAYSIA) SDN BHD

 

 

 

 

 

 

 

 

Member(s) / Affiliate(s)

:

FEDERATION OF MALAYSIAN MANUFACTURERS (FMM)

MALAYSIAN IRON AND STEEL INDUSTRY FEDERATION (MISIF)

SMI ASSOCIATION OF MALAYSIA

SMALL & MEDIUM ENTERPRISE

MALAYSIA EXTERNAL TRADE DEVELOPMENT CORPORATION (MATRADE)

MALAYSIAN INTERNATIONAL CHAMBER OF COMMERCE AND INDUSTRY (MICCI)

 

 

 

Ownership of premises

:

OWNED

 

Production Capacity

:

APPROX 200,000 METRIX TONNES A YEAR.

 

 

Total Number of Employees:

 

YEAR

2012

2011

2010

2009

2008

2007

 

 

 

GROUP

N/A

N/A

N/A

N/A

639

365

 

 

 

COMPANY

750

750

750

750

628

358

 

 

 

 

Branch

:

NO

 

Other Information:


The SC is principally engaged in the (as a / as an) manufacture & sale of steel wire, wire ropes, tyre bead wire, welding wire, galvanised wire & strand.

The SC's products are widely used in the automobiles, autoparts, furniture, logging, earth-moving, mining rail and cranes, shipping, flexible highway guard, excavation exploration quarrying, off-shore oil, containers and engineering sub-sectors.

The SC's high carbon steel wire is widely applicable in bedding and seating in spring mattress, car seat, furniture and mechanical spring wire in automative, electronic & electrical, machinery and so on.

The SC's products are certified as meeting International standards and that of SIRIM. 


PROJECTS


No projects found in our databank 

CURRENT INVESTIGATION

 

Latest fresh investigations carried out on the SC indicated that :

Telephone Number Provided By Client

:

N/A

Current Telephone Number

:

03-55191501

Match

:

N/A

 

 

 

Address Provided by Client

:

NO 7 JALAN UTAS 15/7 SECT 15 40200 SHAH ALAM SELANGOR DARUL EHSAN

Current Address

:

NO 7 JALAN UTAS 15/7 SECT 15, 40200 SHAH ALAM, SELANGOR, MALAYSIA.

Match

:

YES

 

 

 

Latest Financial Accounts

:

YES

 

Other Investigations

we contacted one of the Senior staff from the Accounts Department. She provided some information on the SC.

 

 

FINANCIAL ANALYSIS

 

Profitability

 

 

 

 

 

 

Return on Shareholder Funds

:

Unfavourable

[

<3.94%>

]

 

Return on Net Assets

:

Unfavourable

[

0.30%

]

 

 

 

 

 

 

 

 

The SC's unfavourable returns on shareholders' funds indicate the management's inefficiency in utilising its assets to generate returns.

 

 

 

 

 

 

 

Working Capital Control

 

 

 

 

 

 

Stock Ratio

:

Acceptable

[

60 Days

]

 

Debtor Ratio

:

Favourable

[

31 Days

]

 

Creditors Ratio

:

Favourable

[

5 Days

]

 

 

 

 

 

 

 

 

The SC kept adequate stocks to meet its normal business transactions without incurring excessive storage costs. The favourable debtors' days could be due to the good credit control measures implemented by the SC. The SC had a favourable creditors' ratio as evidenced by its favourable collection days. The SC could be taking advantage of the cash discounts and also wanting to maintain goodwill with its creditors.

 

 

 

 

 

 

 

Liquidity

 

 

 

 

 

 

Liquid Ratio

:

Unfavourable

[

0.43 Times

]

 

Current Ratio

:

Unfavourable

[

1.08 Times

]

 

 

 

 

 

 

 

 

A low liquid ratio means that the SC may be facing working capital deficiency. If the SC cannot obtain additional financing or injection of fresh capital, it may face difficulties in meeting its short term obligations.

 

 

 

 

 

 

 

Solvency

 

 

 

 

 

 

Interest Cover

:

Unfavourable

[

0.05 Times

]

 

Gearing Ratio

:

Unfavourable

[

1.48 Times

]

 

 

 

 

 

 

 

 

The SC's interest cover was low. If its profits fall or when interest rate rises, it may not be able to meet all its interest payment. The SC was highly geared, thus it had a high financial risk. The SC was dependent on loans to finance its business needs. In times of economic downturn and / or high interest rate, the SC will become less profitable and competitive than other firms in the same industry, which are lowly geared. This is because the SC has to service the interest and to repay the loan, which will erode part of its profits. The profits will fluctuate depending on the SC's turnover and the interest it needs to pay.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Overall Assessment :

 

 

 

 

 

 

Due to its weak liquidity position, the SC will be faced with problems in meeting all its short term obligations if no short term loan is obtained or additional capital injected into the SC. If there is a fall in the SC's profit or any increase in interest rate, the SC may not be able to generate sufficient cash-flow to service its interest. The SC's gearing level was high and its going concern will be in doubt if there is no injection of additional shareholders' funds in times of economic downturn and / or high interest rates.

 

 

 

 

 

 

 

Overall financial condition of the SC : POOR

 

 

MALAYSIA ECONOMIC / INDUSTRY OUTLOOK

 

Major Economic Indicators:

2008

2009

2010

2011*

2012**

 

 

 

 

 

 

Population ( Million)

27.73

28.13

28.35

28.70

29.10

Gross Domestic Products ( % )

4.6

<0.5>

7.2

5.5

5.3

Domestic Demand ( % )

6.9

2.9

6.3

4.8

7.6

Private Expenditure ( % )

7.1

<2.7>

8.1

7.0

8.7

Consumption ( % )

8.4

0.7

6.7

6.3

7.1

Investment ( % )

1.5

<17.2>

17.7

16.2

15.9

Public Expenditure ( % )

6.5

5.2

3.8

7.6

4.7

Consumption ( % )

11.6

3.1

0.2

8.9

3.0

Investment ( % )

0.7

8.0

2.8

0.6

7.0

 

 

 

 

 

 

Balance of Trade ( MYR Million )

129,563

89,650

118,356

116,058

-

Government Finance ( MYR Million )

<34,462>

<28,450>

<40,482>

<45,511>

<43,021>

Government Finance to GDP / Fiscal Deficit ( % )

<4.8>

<4.8>

<5.6>

<5.4>

<4.7>

Inflation ( % Change in Composite CPI)

<3.3>

<5.2>

5.1

3.1

-

Unemployment Rate

3.7

4.5

3.9

3.3

-

 

 

 

 

 

 

Net International Reserves ( MYR Billion )

388

331

329

415

-

Average Risk-Weighted Capital Adequacy Ratio ( % )

1.91

2.87

2.20

3.50

-

Average 3 Months of Non-performing Loans ( % )

13.24

11.08

15.30

14.80

-

Average Base Lending Rate ( % )

6.72

5.53

6.30

6.60

-

Business Loans Disbursed( % )

11.6

10.5

14.7

15.3

-

Foreign Investment ( MYR Million )

23,261.4

22,156.8

22,517.9

23,546.1

-

Consumer Loans ( % )

-

-

-

-

-

 

 

 

 

 

 

Registration of New Companies ( No. )

41,599

41,578

44,148

-

-

Registration of New Companies ( % )

<4.0>

<0.1>

6.2

-

-

Liquidation of Companies ( No. )

27,992

39,075

25,585

-

-

Liquidation of Companies ( % )

23.7

39.6

<34.5>

-

-

 

 

 

 

 

 

Registration of New Business ( No. )

269,866

312,581

271,414

-

-

Registration of New Business ( % )

-

-

-

-

-

Business Dissolved ( No. )

18,885

19,345

19,738

-

-

Business Dissolved ( % )

<7.6>

2.4

2.0

-

-

 

 

 

 

 

 

Sales of New Passenger Cars (' 000 Unit )

497.5

486.3

543.6

363.0

-

Cellular Phone Subscribers ( Million )

25.1

30.1

32.8

35.3

-

Tourist Arrival ( Million Persons )

21.5

23.6

24.6

25.3

-

Hotel Occupancy Rate ( % )

68.0

58.0

63.0

51.3

-

 

 

 

 

 

 

Credit Cards Spending ( % )

17.1

12.8

14.1

15.6

-

Bad Cheque Offenders (No.)

34,834

36,667

33,568

27,208

-

Individual Bankruptcy ( No.)

13,907

16,228

18,119

16,155

-

Individual Bankruptcy ( % )

5.1

16.7

11.7

<10.8>

-

 

INDUSTRIES ( % of Growth ):

2008

2009

2010

2011*

2012**

 

 

 

 

 

 

Agriculture

3.6

0.4

2.1

4.7

4.1

Palm Oil

7.0

<1.1>

<3.4>

7.3

-

Rubber

<1.1>

<19.8>

9.9

6.4

-

Forestry & Logging

<1.5>

<5.9>

<3.3>

<4.7>

-

Fishing

4.0

5.5

5.6

2.8

-

Other Agriculture

5.9

9.0

7.9

8.5

-

Industry Non-Performing Loans ( MYR Million )

393.0

413.7

508.4

634.1

-

% of Industry Non-Performing Loans

<2.0>

1.3

2.1

3.2

-

 

 

 

 

 

 

Mining

<0.8>

<3.8>

0.2

<2.4>

2.5

Oil & Gas

12.7

2.1

0.5

<1.7>

-

Other Mining

-

-

-

-

-

Industry Non-performing Loans ( MYR Million )

36.0

44.2

49.7

46.5

-

% of Industry Non-performing Loans

0.1

0.1

0.1

0.1

-

 

 

 

 

 

 

Manufacturing #

1.3

<9.4>

11.4

5.6

4.5

Exported-oriented Industries

2.7

<19.0>

12.1

2.8

-

Electrical & Electronics

2.4

<30.3>

28.4

<4.9>

-

Rubber Products

4.2

<10.1>

25.3

15.4

-

Wood Products

<6.0>

<24.1>

20.1

<7.3>

-

Textiles & Apparel

1.9

<19.5>

<0.4>

14.8

-

Domestic-oriented Industries

9.9

<9.8>

16.3

6.3

-

Food, Beverages & Tobacco

9.5

0.2

3.0

4.2

-

Chemical & Chemical Products

1.4

<7.7>

16.2

5.6

-

Plastic Products

6.5

<9.1>

2.4

3.8

-

Iron & Steel

16.8

<32.7>

29.3

2.4

-

Fabricated Metal Products

14.7

<2.5>

14.9

25.2

-

Non-metallic Mineral

8.3

<15.5>

20.2

16.3

-

Transport Equipment

27.1

<13.5>

36.5

<9.4>

-

Paper & Paper Products

8.6

<5.0>

18.7

15.6

-

Crude Oil Refineries

7.8

0.2

<11.4>

9.3

-

Industry Non-Performing Loans ( MYR Million )

5,729.4

6,007.3

6,217.5

6,537.2

-

% of Industry Non-Performing Loans

16.8

18.3

23.8

25.7

-

 

 

 

 

 

 

Construction

2.1

5.8

5.1

4.4

7.0

Industry Non-Performing Loans ( MYR Million )

4,149.8

3,241.8

4,038.5

3,856.9

-

% of Industry Non-Performing Loans

12.2

9.9

10.7

10.2

-

 

 

 

 

 

 

Services

7.3

2.6

6.5

6.4

6.5

Electric, Gas & Water

5.0

0.4

8.5

5.6

4.8

Transport, Storage & Communication

7.8

1.6

7.7

6.5

7.3

Wholesale, Retail, Hotel & Restaurant

10.0

2.8

4.7

5.2

6.9

Finance, Insurance & Real Estate

9.2

3.8

6.1

6.3

6.5

Government Services

8.6

2.0

6.7

7.6

5.6

Other Services

5.9

4.4

4.2

5.4

5.7

Industry Non-Performing Loans ( MYR Million )

8,281.4

6,631.3

7,384.6

6,825.2

-

% of Industry Non-Performing Loans

24.3

20.2

25.7

23.4

-

 

 

 

 

 

 

 

 

 

 

 

 

* Estimate / Preliminary

 

 

 

 

 

** Forecast

 

 

 

 

 

# Based On Manufacturing Production Index 
(Source : Department of Statistics / Economic Report / Bank Negara Report)

 

                                                                                             

INDUSTRY ANALYSIS

 

MSIC CODE

 

28992 : Manufacture of wire, wire products and metal fasteners

 

 

INDUSTRY :

MANUFACTURING

 

 

 


The manufacturing sector is expected to be driven by higher value-added activities in Malaysia.The GDP growth for first quarter 2012 indicating manufacturing maintain its growth of 4.5%, similar to year 2011.Malaysia recorded a 12% jump in approved investments in the manufacturing sector in the first quarter of 2012 compared with the corresponding period 2011. According to Federation of Malaysian Manufacturers (FMM), manufacturing sector expected to improve in the third quarter 2012 despite concerns over external developments and the rising cost of production.


The rubber products sub-sector is expected to remain resilient supported by continuous improvements in medical and healthcare standards in emerging markets as well as demand from niche markets such as the oil and gas sector for rubber hoses. Malaysia rubber exports are forecast to grow at 10%, at the end of 2012 driven by global demand for medical gloves as well as rubber tyres and tubes.Rubber glove exports make up 70 % of total rubber shipments in Malaysia due to hospitals and clinics place more intrest on rising health and hygiene awareness.


The Malaysia government has growth target of 6.5% for wood based furniture where estimated to reach up to RM53 billion by year 2020.The government providing pioneer status for tax exemption and investment tax allowance for this industry as a boost up step towards produce good quality product and to meet the world demand.


Chemical production are expected to show 6.2% in year 2012 and 7.5 % in year 2013 inline with Malaysia as one of the largest contributor in world Chemicals & Chemical industries.


According to Malaysian Iron and Steel Industry Federation, first half of 2012 would remain weak for the local steel industry due to eurozone crisis, slowdown in China's economy and less robust construction activities in the developed countries. At first quarter 2012, the average local steel price is trading atRM2,300 per tonne compared with the average international price of US$740 (RM2,331) per tonne.


According to the Department of Statistics, Malaysia during the first quarter 2012, the manufacturing output increased due to activities in major sub-sectors such as petroleum, chemical, rubber and plastic products (10.5 %), and non-metallic mineral products, basic metal and fabricated metal products (3.9 %). Meanwhile, it's also announced that the manufacturing sector's sales grew by 10 % in May 2012 to record RM52.5 billion compared with RM47.7 billion in May 2011. The Industrial Production Index (IPI ) increased 7.6 % in May (2012) due to increases in manufacturing (6.5 %). 


Tax and non-tax incentives provided by goverment encourage manufacturers to move up the value chain of manufacturing industry. The new growth initiatives by goverment in the manufacturing sector such as solar and medial services can be important drivers of growth apart from helping to diversify the manufacturing base and contributing to the resilience of the sector.

 

 

OVERALL INDUSTRY OUTLOOK : Average Growth

 

CREDIT RISK EVALUATION & RECOMMENDATION

 

Incorporated in 1980, the SC is a Private Limited company, focusing on manufacture & sale of steel wire, wire ropes, tyre bead wire, welding wire, galvanised wire & strand. The SC has been in business for over 3 decades. It has built up a strong clientele base and good reputation will enable the SC to further enhance its business in the near term. The SC is expected to enjoy a stable market shares. The SC is well backed by a listed holding company which would stimulate further growth for the SC. Hence, the potential growth of the SC is positive. The SC is a large entity with strong capital position. 


Over the years, the SC has established an extensive clientele base in the market. Besides catering to the local market, the SC has penetrated into other countries. With the contribution of both local and overseas customers, the SC is likely to be exposed to lower commercial risk. Hence, we believe that the SC has better business expansion opportunities in the future. Being a large entity, the SC has a steady workforce of 750 personnel to support its business operations. Its future prospects seem to be fairly good as its business operations are running relatively stable. Overall, we regard that the SC's management capability is average. 


In year 2011, the SC has recorded a turnover of MYR 517,032,000 and it has suffered pre-tax losses of MYR 4,614,000. The SC has generated an unfavourable return on shareholders' funds indicating that the management was inefficient in utilising its funds to generate return. Due to its weak liquidity position, the SC may face working capital deficiency in meeting its short term financial obligations if no fresh capital are injected into the SC. The high gearing ratio clearly implied that the SC was supported by more debt than equity. Nevertheless, given a positive net worth standing at MYR 66,890,000, the SC should be able to maintain its business in the near terms.


Having a strong assets backing, the SC possesses latent assets as collateral for further financial extension. Hence, it has good chance of getting loans if the needs arises. The SC's supplier are from both the local and overseas countries. This will eliminates the risk of dependency on deliveries from a number of key suppliers and insufficient quantities of its raw materials. 


The SC's payment habit is average. With its adequate working capital, the SC should be able to pay its short term debts.


The industry shows an upward trend and this trend is very likely to sustain in the near terms. Hence, the SC is expected to benefit from the favourable outlook of the industry.


Based on the above condition, we recommend credit be granted to the SC normally.

 


PROFIT AND LOSS ACCOUNT

 

THE FINANCIAL STATEMENTS WERE PREPARED IN ACCORDANCE WITH MALAYSIAN FINANCIAL REPORTING STANDARDS(FRS)

BEKAERT SOUTHERN WIRE SDN. BHD.

 

Financial Year End

30/06/2011

31/12/2009

31/12/2008

31/12/2007

Months

18

12

12

12

Consolidated Account

GROUP

GROUP

GROUP

GROUP

Audited Account

YES

YES

YES

YES

Unqualified Auditor's Report (Clean Opinion)

YES

YES

YES

YES

Financial Type

FULL

FULL

FULL

FULL

Currency

MYR

MYR

MYR

MYR

 

 

 

 

 

TURNOVER

517,032,000

304,736,000

467,721,000

404,874,000

 

----------------

----------------

----------------

----------------

Total Turnover

517,032,000

304,736,000

467,721,000

404,874,000

Costs of Goods Sold

<485,785,000>

<287,462,000>

-

-

 

----------------

----------------

----------------

----------------

Gross Profit

31,247,000

17,274,000

-

-

 

----------------

----------------

----------------

----------------

 

 

 

 

 

PROFIT/(LOSS) FROM OPERATIONS

<4,614,000>

1,741,000

22,531,000

<7,774,000>

 

----------------

----------------

----------------

----------------

PROFIT/(LOSS) BEFORE TAXATION

<4,614,000>

1,741,000

22,531,000

<7,774,000>

Taxation

1,979,000

<328,000>

<3,256,000>

8,078,000

 

----------------

----------------

----------------

----------------

PROFIT/(LOSS) AFTER TAXATION

<2,635,000>

1,413,000

19,275,000

304,000

 

----------------

----------------

----------------

----------------

RETAINED PROFIT/(LOSS) BROUGHT FORWARD

 

 

 

 

As previously reported

75,316,000

73,903,000

54,628,000

54,324,000

 

----------------

----------------

----------------

----------------

As restated

75,316,000

73,903,000

54,628,000

54,324,000

 

----------------

----------------

----------------

----------------

PROFIT AVAILABLE FOR APPROPRIATIONS

72,681,000

75,316,000

73,903,000

54,628,000

- General

<1,578,000>

-

-

-

DIVIDENDS - Ordinary (paid & proposed)

<19,098,000>

-

-

-

 

----------------

----------------

----------------

----------------

RETAINED PROFIT/(LOSS) CARRIED FORWARD

52,005,000

75,316,000

73,903,000

54,628,000

 

=============

=============

=============

=============

 

 

 

 

 

INTEREST EXPENSE (as per notes to P&L)

 

 

 

 

Others

4,843,000

2,749,000

5,005,000

5,116,000

 

----------------

----------------

----------------

----------------

 

4,843,000

2,749,000

5,005,000

5,116,000

 

 

BALANCE SHEET

 

BEKAERT SOUTHERN WIRE SDN. BHD.

 

ASSETS EMPLOYED:

 

 

 

 

FIXED ASSETS

57,713,000

65,415,000

49,744,000

56,797,000

 

 

 

 

 

LONG TERM INVESTMENTS/OTHER ASSETS

 

 

 

 

Deferred assets

7,307,000

3,175,000

3,124,000

3,422,000

Others

-

-

21,360,000

21,786,000

 

----------------

----------------

----------------

----------------

TOTAL LONG TERM INVESTMENTS/OTHER ASSETS

7,307,000

3,175,000

24,484,000

25,208,000

 

 

 

 

 

 

----------------

----------------

----------------

----------------

TOTAL LONG TERM ASSETS

65,020,000

68,590,000

74,228,000

82,005,000

 

 

 

 

 

CURRENT ASSETS

 

 

 

 

Stocks

85,387,000

74,656,000

80,299,000

65,522,000

Trade debtors

43,518,000

32,838,000

34,782,000

49,214,000

Other debtors, deposits & prepayments

2,054,000

894,000

2,791,000

5,345,000

Amount due from holding company

186,000

-

-

-

Amount due from related companies

5,261,000

3,824,000

2,798,000

1,620,000

Cash & bank balances

4,801,000

10,391,000

10,219,000

11,604,000

Others

247,000

4,504,000

12,197,000

3,917,000

 

----------------

----------------

----------------

----------------

TOTAL CURRENT ASSETS

141,454,000

127,107,000

143,086,000

137,222,000

 

----------------

----------------

----------------

----------------

TOTAL ASSET

206,474,000

195,697,000

217,314,000

219,227,000

 

=============

=============

=============

=============

 

 

 

 

 

CURRENT LIABILITIES

 

 

 

 

Trade creditors

6,836,000

7,595,000

5,784,000

8,335,000

Other creditors & accruals

10,285,000

5,803,000

6,717,000

8,350,000

Bank overdraft

1,781,000

629,000

3,169,000

2,650,000

Other borrowings

96,974,000

18,000,000

29,128,000

31,112,000

Bill & acceptances payable

-

56,692,000

73,861,000

81,709,000

Amounts owing to holding company

14,947,000

-

-

-

Amounts owing to related companies

4,000

7,000

13,000

28,000

Provision for taxation

-

-

323,000

-

Other liabilities

-

9,861,000

1,888,000

10,002,000

 

----------------

----------------

----------------

----------------

TOTAL CURRENT LIABILITIES

130,827,000

98,587,000

120,883,000

142,186,000

 

----------------

----------------

----------------

----------------

NET CURRENT ASSETS/(LIABILITIES)

10,627,000

28,520,000

22,203,000

<4,964,000>

 

----------------

----------------

----------------

----------------

TOTAL NET ASSETS

75,647,000

97,110,000

96,431,000

77,041,000

 

=============

=============

=============

=============

 

 

 

 

 

SHARE CAPITAL

 

 

 

 

Ordinary share capital

13,685,000

13,585,000

13,585,000

13,585,000

 

----------------

----------------

----------------

----------------

TOTAL SHARE CAPITAL

13,685,000

13,585,000

13,585,000

13,585,000

 

 

 

 

 

RESERVES

 

 

 

 

Retained profit/(loss) carried forward

52,005,000

75,316,000

73,903,000

54,628,000

 

----------------

----------------

----------------

----------------

TOTAL RESERVES

52,005,000

75,316,000

73,903,000

54,628,000

 

 

 

 

 

MINORITY INTEREST

1,200,000

-

-

-

 

----------------

----------------

----------------

----------------

SHAREHOLDERS' FUNDS/EQUITY

66,890,000

88,901,000

87,488,000

68,213,000

 

 

 

 

 

LONG TERM LIABILITIES

 

 

 

 

Deferred taxation

-

-

642,000

548,000

Others

8,757,000

8,209,000

8,301,000

8,280,000

 

----------------

----------------

----------------

----------------

TOTAL LONG TERM LIABILITIES

8,757,000

8,209,000

8,943,000

8,828,000

 

----------------

----------------

----------------

----------------

 

75,647,000

97,110,000

96,431,000

77,041,000

 

=============

=============

=============

=============

 

 

 

 

 

 

FINANCIAL RATIO

 

BEKAERT SOUTHERN WIRE SDN. BHD.

 

TYPES OF FUNDS

 

 

 

 

Cash

4,801,000

10,391,000

10,219,000

11,604,000

Net Liquid Funds

3,020,000

9,762,000

7,050,000

8,954,000

Net Liquid Assets

<74,760,000>

<46,136,000>

<58,096,000>

<70,486,000>

Net Current Assets/(Liabilities)

10,627,000

28,520,000

22,203,000

<4,964,000>

Net Tangible Assets

75,647,000

97,110,000

96,431,000

77,041,000

Net Monetary Assets

<83,517,000>

<54,345,000>

<67,039,000>

<79,314,000>

BALANCE SHEET ITEMS

 

 

 

 

Total Borrowings

98,755,000

18,629,000

32,297,000

33,762,000

Total Liabilities

139,584,000

106,796,000

129,826,000

151,014,000

Total Assets

206,474,000

195,697,000

217,314,000

219,227,000

Net Assets

75,647,000

97,110,000

96,431,000

77,041,000

Net Assets Backing

66,890,000

88,901,000

87,488,000

68,213,000

Shareholders' Funds

66,890,000

88,901,000

87,488,000

68,213,000

Total Share Capital

13,685,000

13,585,000

13,585,000

13,585,000

Total Reserves

52,005,000

75,316,000

73,903,000

54,628,000

LIQUIDITY (Times)

 

 

 

 

Cash Ratio

0.04

0.11

0.08

0.08

Liquid Ratio

0.43

0.53

0.52

0.50

Current Ratio

1.08

1.29

1.18

0.97

WORKING CAPITAL CONTROL (Days)

 

 

 

 

Stock Ratio

60

89

63

59

Debtors Ratio

31

39

27

44

Creditors Ratio

5

10

5

8

SOLVENCY RATIOS (Times)

 

 

 

 

Gearing Ratio

1.48

0.21

0.37

0.49

Liabilities Ratio

2.09

1.20

1.48

2.21

Times Interest Earned Ratio

0.05

1.63

5.50

<0.52>

Assets Backing Ratio

5.53

7.10

7.05

5.63

PERFORMANCE RATIO (%)

 

 

 

 

Operating Profit Margin

<0.89>

0.57

4.82

<1.92>

Net Profit Margin

<0.51>

0.46

4.12

0.08

Return On Net Assets

0.30

4.62

28.56

<3.45>

Return On Capital Employed

0.29

4.59

27.65

<3.34>

Return On Shareholders' Funds/Equity

<3.94>

1.59

22.03

0.45

Dividend Pay Out Ratio (Times)

7.25

0.00

0.00

0.00

NOTES TO ACCOUNTS

 

 

 

 

Contingent Liabilities

0

0

0

0

 

FOREIGN EXCHANGE RATES

 

Currency
Unit

Indian Rupees

US Dollar

1

Rs.52.82

UK Pound

1

Rs.84.96

Euro

1

Rs.68.61

 

INFORMATION DETAILS

 

Report Prepared by :

MNL

 

RATING EXPLANATIONS

 

RATING

STATUS

 

 

PROPOSED CREDIT LINE

>86

Aaa

Possesses an extremely sound financial base with the strongest capability for timely payment of interest and principal sums

 

Unlimited

71-85

Aa

Possesses adequate working capital. No caution needed for credit transaction. It has above average (strong) capability for payment of interest and principal sums

 

Large

56-70

A

Financial & operational base are regarded healthy. General unfavourable factors will not cause fatal effect. Satisfactory capability for payment of interest and principal sums

 

Fairly Large

41-55

Ba

Overall operation is considered normal. Capable to meet normal commitments.

 

Satisfactory

26-40

B

Capability to overcome financial difficulties seems comparatively below average.

 

Small

11-25

Ca

Adverse factors are apparent. Repayment of interest and principal sums in default or expected to be in default upon maturity

 

Limited with full security

<10

C

Absolute credit risk exists. Caution needed to be exercised

 

 

Credit not recommended

----

NB

New Business

----

 

This score serves as a reference to assess SC’s credit risk and to set the amount of credit to be extended. It is calculated from a composite of weighted scores obtained from each of the major sections of this report. The assessed factors and their relative weights (as indicated through %) are as follows:

 

Financial condition (40%)            Ownership background (20%)                 Payment record (10%)

Credit history (10%)                    Market trend (10%)                                Operational size (10%)

PRIVATE & CONFIDENTIAL : This information is provided to you at your request, you having employed MIPL for such purpose. You will use the information as aid only in determining the propriety of giving credit and generally as an aid to your business and for no other purpose. You will hold the information in strict confidence, and shall not reveal it or make it known to the subject persons, firms or corporations or to any other. MIPL does not warrant the correctness of the information as you hold it free of any liability whatsoever. You will be liable to and indemnify MIPL for any loss, damage or expense, occasioned by your breach or non observance of any one, or more of these conditions

This report is issued at your request without any risk and responsibility on the part of MIRA INFORM PRIVATE LIMITED (MIPL) or its officials.