Chin Well Holdings executive director Tsai Chia-ling
GEORGE TOWN: Fastener and wire producer Chin Well Holdings Bhd
can benefit from the new US tariffs on China-made fasteners, as the company is among a few that can produce fasteners based on the imperial measurement system used in the United States.
Group executive director Tsai Chia-ling told StarBiz that the new tariffs would divert orders to Malaysia. “Chin Well is well positioned to capture the orders, as we are among a few fastener manufacturers in the region that can produce imperial standard fasteners.
“The United States is among a handful of countries using the imperial measurement system.
“Companies aiming to support the US market have to be able to manufacture imperial standard fasteners.
“However, it is costly to invest in imperial standard moulds, so there are only a handful of manufacturers in the market producing for the US market,” she said.
The United States could impose nearly 40% tariffs on imports from China in 2025. Tsai added that the weaker ringgit would also allow the group to improve its performance.
“A weaker ringgit will give us a higher conversion rate, which will boost our future bottom line,” she said.
In the first quarter of financial year 2025 ended Sept 30, 2024, the group recorded a total revenue of RM105.93mil, which represented an increase of 26.4%.
However, the group’s results did not improve in line with the higher sales.
“The group registered a loss before tax of RM3.92mil in the current quarter as compared to a profit before tax of RM3.37mil in the corresponding period in the preceding year.
“The group’s loss before tax resulted from a lower profit margin achieved from its revenue amidst the lower average selling price and foreign-exchange losses in the current quarter resulting from the strengthening of the ringgit against the US dollar.”
Tsai added that the group expected more major construction projects in Malaysia to restart soon, which would result in deliveries to customers in the related industry.
“In addition to the existing core business, from time to time, the group will explore other new business ventures which will potentially benefit,” she added. According to Tsai, the European market is improving.
“If the Russia-Ukraine War and the Red Sea crisis end soon, the European market should have a significant upturn.
“If the war continues, the European market will remain flat or show slight improvement,” she said.
Chin Well also expects the contribution from the US market to improve in 2025. “We should see our threaded rods and bolts exports sales to the United States ramping up,” Tsai said.
According to the Allied Market Research report, the global fasteners market, valued at US$97.2bil in 2022, will hit US$151bil by 2032, growing at a 4.6% compounded annual growth rate from 2023 to 2032.
“Increasing investments in infrastructure projects are driven by the need to modernise ageing infrastructure, accommodate growing populations and support economic development.
“Governments and private-sector entities are committing significant resources to these projects, which, in turn, stimulate demand for a wide range of fasteners,” the report said.
