KUALA LUMPUR: Particle board manufacturer, HeveaBoard Bhd, is on track to turn into net cash position by next year as its term loans have been mostly repaid and reduced to less than US$9mil (RM38mil).
Group managing director, Yoong Hau Chun, said on Thursday the company had been consistently paying RM26mil annually to service the principal of the loan. It also does not have plans to see any any major term loans.
"Once we have all the burdens off our shoulders, we can be a lot more bolder in our decisions and it will put put us in a strong position to increase dividend payout," he said on the business prospects.
Heveaboard would allocate RM15mil as capital expenditure for its upstream and downstream divisions to upgrade equipment and increase the quality of the products.
He said the company would rather focus on increasing the quality rather than the quantity given that its clients were mostly the higher-tier companies, especially its major export market, Japan, which contributed RM15mil in revenue monthly.
Yoong said HeveaBoard has all its cost denominated in ringgit while more than 90% of its revenue were US dollar-denominated, making the company a beneficiary of the currency volatility.
Executive director Liven Yoong, said the company, which was traditionally involved in the business-to-business market, would also venture into the business-to-consumer market by adding eco-friendly children furniture into its offerings.
She said for a start, the product would be marketed in the Malaysia by year-end and eventually exported regionally.
"What we are offering is a niche product as we emphasise on low formaldehyde emission furniture, which is not yet available in this market.
"Not many people are aware that formaldehyde is everywhere especially in furniture and children are the most vulnerable to its harmful effects," she said.