FCW to venture into property development

The project, named Riana Dutamas, is expected to be built on a 6.5ha land along Jalan Segambut

by KEVIN WONG / pic by ISMAIL CHE RUS

FCW Holdings Bhd’s venture into the property market will be propelled by its joint venture with IJM Land Bhd to complete a mixed development project with a gross development value (GDV) of RM1.5 billion.

FCW non-ED Datuk Anderson Thor Poh Seng (picture) said the project, named “Riana Dutamas”, is expected to be built on a 6.5ha land along Jalan Segambut.

He said the project is divided into three phases, comprising serviced apartments, retail lots and small office/virtual office units.

“To kick-start the first phase of this development, we will be launching our serviced apartments, Arcelo & Arcilla.

“We have recently completed the sales gallery and have received the necessary approvals,” he said at the company’s AGM in Kuala Lumpur yesterday.

The first phase, the serviced apartment blocks with a GDV of RM570 million, is expected to be launched in January.

He said Arcelo & Arcilla consists of a thousand units with sizes ranging between 600-sq ft and 1,000 sq ft (92.9 sqm).

Thor said despite the soft property market, the company has been receiving positive response for the project as 50% of the units have been reserved by buyers.

“At the moment, we are currently focusing on the serviced apartments as we will be gauging the demand before we proceed to the next phase. If the demand is good, we will then embark on the second phase,” he said.

Meanwhile, FCW’s wholesale segment, which involves contract manufacturing of toiletries and personal care products, has enjoyed stable growth as the group continues to look for new ways to expand the business.

Thor said the group will be focusing on higher value products, as well as expanding its facilities, while automating some of the manufacturing processes.

“At the same time, we plan to explore new export markets by participating in trade fairs in Myanmar, Vietnam, Singapore, China and Thailand.

“Currently, approximately 80% of our sales are from domestic sales while 20% are for exports,” he said. Thor added that the retail market is also expected to be weak for the next two years because of lower buying power due to the ringgit’s depreciation, as well as the implementation of the Goods and Services Tax.

As such, he said FCW will remain focused on maintaining its revenue and profits from the wholesale business.

FCW recorded a loss after tax of RM534,000 on the back of a RM8.29 million revenue for the first financial quarter of 2018 ended Sept 30, 2017.

The loss was attributed to FCW’s associate company, Fujikura Federal Cables Sdn Bhd, that contributed a share of loss in the current quarter of RM63,100 compared to a share of profit of RM29,000 in the corresponding quarter of the preceding year.

The losses were mainly due to a substantial decrease in higher margin export sales in the quarter.

Thor said some cost-cutting measures have been taken, including the retrenchment of 90 contract workers.