BY DAVID TAN

BUKIT TENGAH: Leader Steel Holdings Bhd expects its revenue and profit for financial year 2016 to improve by strong double-digit percentage over 2015 due to higher steel prices and stronger demand from the construction, renovation and furniture industries.

Group managing director Datin Tan Pak Say told StarBiz that the pricing of steel pipes was now around RM3,000 per tonne, about 25% higher than in early January.

She said steel pipe prices had increased due to the stringent conditions regulating the entry of imported steel products.

“Since late 2013, imported steel products need to have product certificate licensing and certificate of approval to sell in the country.

“As a result, there is less competition from low-quality steel products from overseas.

“The anti-dumping duties introduced in early 2015 for hot-rolled and cold-rolled coil from China is also beginning to produce results,” she added.

Tan said that since January, the group had seen orders from the construction, renovation and furniture industries increased by more than 15%.

“Our new production line installed at the Sungai Bakap plant late last year has helped us to cope with the new orders by raising output by more than 10%,” she said.

For the nine months of the financial year ended Sept 30, 2016, Leader Steel had returned to the black with a net profit of RM5.2mil on the back of a RM120mil revenue, compared with a net loss of RM2.5mil and a revenue of RM121mil previously.

Last year, the group posted a net loss of RM872,000 on the back of a RM32.5mil turnover.

Moving forward, the group expects the trend in orders to maintain in 2017.

“The prices of steel should maintain also. We can expect a strong double-digit percentage growth for the group in 2017.

“We plan to increase our production capacity by about 20% for 2017 to produce more variety of steel products in different sizes,” she added.

On its business operations in Sarawak, Tan said the plant there had recently obtained SIRIM certification for its steel products sold in East Malaysia.

“The certification will help the group to broaden its customer base in East Malaysia,” she said.

On the trading segment which contributes about 20% of the group’s revenue, Tan said Leader Steel’s manganese products were sold largely in China.

“The price of manganese has risen by more than 50% since early this year,” she added.