JADI IMAGING STRIKES THE RIGHT TONE

[Anonymous]

Jadi strikes the right tone
Toner manufacturer Jadi Imaging Technologies Sdn Bhd expects to achieve a net profit of RM10.85mil and revenue of RM63.52mil in this financial year.(MALAYSIA)
“We are embarking on additional business strategies to attain our projected numbers. These include establishing a facility in Suzhou, China, which is expected to commence operations in April,” he told StarBiz in an interview.
“The plant, located in the Suzhou Industrial Park, is aimed at providing better services by reaching all our domestic customers efficiently.” He added that China was the group’s biggest export market, contributing 15% of its sales in 2005.
“This year, we expect a 23% sales contribution from China due mainly to the setting up of the new plant,” Liew said.
Jadi, which is expected to be listed on Bursa Malaysia second board on Feb 28, has so far secured eight clients in China. It exports about three tonnes per month to the republic.
It plans to launch its prospectus this month.
On Oct 27, 2005, Jadi received approval from the Jiangsu Provincial Government to manufacture toners in Suzhou.
The company has set up a subsidiary, Jadi Imaging Technologies (Suzhou) Co Ltd (Jadi Suzhou), as a wholly-owned foreign enterprise to produce toners for the China market.
The group had been exporting to China since it began operations in 1999, said Liew, adding that Jadi Suzhou would allow the group to penetrate deeper into the rapidly expanding Chinese toner market.
Jadi plans this year to add two production lines that would almost double its annual capacity to 4,400 tonnes from the current 2,300 tonnes. It has three production lines at its plant in Shah Alam. The fourth line will be installed in China and the fifth in Malaysia.
“By increasing production lines, we will boost the group’s current year revenue and net profit,” Liew said.
Jadi’s core business is the manufacture of toners, a dry powdery substance used as printing material in laser printers, copiers, facsimile machines and multi-function office equipment, including those of Hewlett-Packard, Canon, Lexmark, Panasonic and Epson.
The company supplies mainly to the aftermarket clients and only focuses on the supply of bulk toners.
Liew noted that different toner formulations were required for different brands and models due to differences in the specifications and functionalities.  
The group had developed 26 formulations of in-house toners as at Nov 15, 2005.
“We allocated about 2.1% of our revenue last year for research and development (R&D). This year, we plan to allocate about 3.1%,” he said.
Currently, Jadi manufactures only black toners. However, it plans to manufacture colour toners next year to meet the projected growth in demand for colour printers globally.
On Nov 23, Jadi signed an agreement with Universiti Malaya to undertake a joint research on chemical toners.
Chemical toners are produced using wet chemical processes, which help achieve better quality in colour printing.
“The project will allow us to develop new products and produce high-quality toners more efficiently with lower costs. It will also boost Malaysia’s competitive edge in toner manufacturing,” Liew said.  
For the seven months ended July 31, 2005, Jadi posted a net profit of RM5.46mil from a revenue of RM26.28mil. “For the financial year ended Dec 31, 2005, we expect to achieve revenue and net profit of about RM43mil and RM9mil respectively,” he said.
Jadi has 88 customers in 35 countries, which include Indonesia, Brazil, Ukraine, Thailand, Vietnam, South America and North America.
Exports accounted for 94.4% of group revenue last year, Liew said, adding that Jadi aimed to increase customer base in North and South America.
The company plans to use RM6mil from the proceeds of its initial public offering to buy land in Shah Alam for a new R&D facility, RM20mil to acquire production lines, RM7.7mil for working capital and RM1.6mil for listing expenses.

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February 14, 2006 at 9:42 AM