25 April 2012
Hovid plans to build manufacturing plant in the Philippines, currently 4%-5% revenue came from the Philippines
(HOVID opening stock price today (25.4.2012) was 23 sen)
Hovid Bhd, a manufacturer of ethical drugs and health and dietary supplements, plans to build a manufacturing plant in the Philippines, possibly within two years, as its business here improves, said its managing director David Ho.
The Philippine market had been generating steady sales for Hovid over the past seven years, Ho said.
He added that all of the company's products, numbering almost 30, were well accepted in the country.
"We like to grow our products to more than 100 eventually and we are looking at setting up a plant here as imported products are subject to a three per cent here," he told Business Times on the sidelines of the Malaysia-Philippines Palm Oil Trade Fair & Seminar.
The seminar was organised by the Malaysian Palm Oil Council and the Malaysian Palm Oil Board.
There was also a forum themed "Healthy Lifestyle with Palm Products" targeting the medical fraternity within the Philippines.
Ho said Hovid's products were managed and marketed by its wholly-owned subsidiary Hovid Philippines with a staff strength of more than 100 people.
"Business has been good for us here, although it took a while to get going as product registering takes about a year," he said.
Four to five per cent of Hovid's revenue came from the Philippines, he added.
Close to 60 per cent of Hovid's products are exported to most Asian countries, except Indonesia and Thailand, and African countries, which is its biggest market.
"We can't go into Indonesia because the country does not accept Malaysia-registered products while in Thailand, the product registering process is not easy and time-consuming," he lamented.
Hovid currently has two plants in Perak and one in India.
Ho said the company was looking at building another plant in Malaysia and it might take place next year.
He declined to reveal the likely investment cost but said even a small plant would cost between RM20 million and RM30 million.
On its business outlook this year, Ho said he was confident that Hovid would do well in the financial year ending June 30, 2012, after last financial year's weak performance, in which it was dragged down by the numbers in its then loss-making subsidiary, Carotech Bhd.
For the second quarter ended December 31, 2011, Hovid's net profit grew to RM10.76 million from RM1.47 million in the previous corresponding quarter.
It also made a one-time gain of RM7.7 million after it pared down its interest in Carotech to 17.6 per cent from 25 per cent previously.