News & Events

New driving force for Central Global

“Our manufacturing plant is now allowed to operate with a full workforce and production is running at near full capacity in order to clear the backlog of orders from customers, of which 28% are from abroad.” - Chew Hian Tat

LITTLE-known businessman Chew Hian Tat first emerged as a major shareholder in Central Global Bhd (CGB) back in late February 2021 when he acquired close to a 25% stake in the group.

Today, with a stake of 30% and having been made the group’s managing director in November, Chew explains what he sees in the company and the tasks that lay ahead on how he intends to strengthen CGB.

CGB is not a new company. It has been a maker of industrial high-temperature masking tapes since 1972 and in 2017, it ventured into the construction industry.

While these may not be overly exciting industries, Chew, who has been a businessman involved in areas such as property development, IT systems for parking and distribution of health and supplement products, sees “vast opportunities” for CGB to expand.

“In CGB, I saw an opportunity for the company to grow in both the manufacturing and construction sectors beyond the domestic market,” Chew, 47, tells StarBizWeek.

Through wholly-owned subsidiary Central Industrial Corp Bhd, the group is currently the biggest masking tape manufacturer in Malaysia, serving both the domestic and international markets such as Australia, New Zealand, the United States and China.

Chew believes the group can become the biggest player in the self-adhesive tape and label industries in South-East Asia by 2023.

He also intends to leverage on his network, particularly in the construction business, to further grow CGB.

Chew says the group is open to explore new segments beyond construction and manufacturing.

“In today’s ever-changing business environment, an organisation must be able to revitalise itself as well as respond and adapt to change quickly,” he adds.

He says the group’s construction team is in preliminary discussions with a few potential partners for these new pursuits.

CGB recently signed a memorandum of understanding with Smart Sabah Corp Sdn Bhd to set up a joint venture to create a digital dashboard for the Sabah’s Ministry of Finance website.

Going forward, it plans to venture into the renewable energy segment with the construction of solar photovoltaic projects within Asean, adds Chew.

CGB’s construction arm provides building and contract works in the northern region of Peninsular Malaysia. Projects it has completed include Tri-Pinnacle, Eco Horizon (Ashton) and Beacon Executive Suites.

Chew says the group’s manufacturing division is being streamlined to make it more capable of delivering “holistic and organic” growth.

In line with its aim to become the biggest player in the self-adhesive tape and label industries in South-East Asia by 2023, the group will be investing in new machines to improve its production efficiency by 2.5 times to 70 million sq m of tapes per year.

This is to meet the increasing demand for its products from customers both locally and abroad, says Chew.

“We also intend to enhance the range of specialty tapes and extend our product portfolio for tape-related items to cater to a wider spectrum of customers,” he says.

Where new business opportunities are concerned, Chew says the group is evaluating segments such as renewable energy, IT and healthcare-related industries.

He also does not rule out streamlining the business he is involved in outside the listed entity under the CGB umbrella in the future.

Chew started his career in 1996 with Shanghai Chanda Steel Sales Co in China, where he mainly dealt in international trade and construction.

In 2001, he became an entrepreneur and now helms private companies involved in property development, licensed multi-level direct selling, health and supplement product distribution and IT parking systems.

Chew is also busy steering the group out of the Covid-19 challenges.

He says the containment measures imposed by the government to curb the spread of the virus hindered the group’s production to a certain extent, which in turn affected its financial performance.

“In June, our manufacturing plant was only allowed to operate at 60% capacity, followed by a total closure in July 2021 due to the enforcement of the full movement control order. We were only allowed to resume operations the following month at 60% workforce capacity.

“Consequently, many orders could not be fulfilled and shipped on time, which has given rise to a significant backlog of orders,” he says.

For the third quarter ended Sept 30, 2021, CGB posted a net loss of RM2.38mil, bringing total losses for the nine-month period to RM3.92mil.

However, Chew expects the group to turn around in the fourth quarter with the economy showing encouraging signs of recovery.

“Our manufacturing plant is now allowed to operate with a full workforce and production is running at near full capacity in order to clear the backlog of orders from customers, of which 28% are from abroad,” he says.

According to Chew, the group is also optimistic about its prospects in the construction sector with tender book standing at RM655mil.

It has two ongoing construction projects, namely the Montage condominium in Bayan Lepas, Penang, and the upgrading of a water supply system in Lahad Datu, Sabah.

CGB recently placed out 10.864 million shares and has successfully raised some RM12.15mil from the private placement exercise as at end-October 2021.

The bulk of the money will go towards the purchase and installation of a new masking tape coater production line and to fund its existing construction projects.

Shares of CGB closed 24 sen higher at RM1.33 yesterday, giving the stock a market capitalisation of RM135.48mil.

Source: KLSE Screener