Sarawak Cable is Set to improve Margins by Acquisitions and Enhancing Efficiencies

Sarawak Cable Bhd is eyeing better margins and more jobs in Peninsular Malaysia to strengthen the group's footing.

AmResearch has reported the management's plans were to improve the margins of the two proposed acquisitions of Universal Cable (M) Bhd and Leader Cable Industry Bhd by focussing on medium- and high-voltage cables, which brought about higher margins.

Moreover, it noted in its report that the management would improve margins by leveraging on economies of scale and enhancing efficiencies.

The two cable manufacturers post acquisitions come with a pre-tax profit guarantee of RM21mil for the financial year 2014 forecast (FY14F).  Also, the group may move its production lines at the Nilai Plant to Sabah to secure the demand there. Consolidations of operations in Peninsular Malaysia with a combined market share of 50% would be a beneficial component for the group, as it would secure more transmission jobs.

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