RGT ramps up production capacity

The company plans to add new production lines and machineries to raise hygiene products production amid surging demand

by NUR HAZIQAH A MALEK / pic by BLOOMBERG

HYGIENE and air care dispenser manufacturer RGT Bhd plans to add new production lines and machineries in the last quarter of its financial year 2020 to meet sales order backlogs.

RGT chairman Datuk Low Keng Kok stated that the US-China trade war has provided the company with competitive advantage to meet demand until 2021.

“With new customers and new products in the pipeline, the group will be doubling our production capacity and warehousing area to cater for future demand for next five years,” he said in the company’s annual report filing to Bursa Malaysia yesterday.

Since March 2020, the company has seen an increase in orders from existing customers, especially for its hygiene care products, consisting of soap and hand sanitiser dispensers.

Strong sales orders have been registered from clients in the US and Europe, according to Low.

Early this year, the company purchased 1.3 acres (0.53ha) of adjacent land with a factory building for RM7.5 million.

“We will convert this facility into warehousing space, while turning the existing raw material and finished goods warehouse into production areas. This expansion is anticipated to be completed by the end of 2021,” he said.

Besides ramping up production, RGT also plans to commence its precision spray-painting services business under a controlled cleanroom environment.

“The factory is currently under renovation and is expected to commence full operations by the second quarter of the company’s financial year of 2021 (FY21) with strategic focus on, but not limited to hygiene care and medical products.

“We continue to strengthen our research and development team to improve our existing products and fresh designs of new products,” he noted.

Simultaneously, the company is investing and developing its human capital, while incorporating more automation in its operation to improve process efficiency, productivity and cost reduction.

RGT, formerly known as Asia Knight Bhd, was seen returning to the black for FY19 ended June 30, 2019, mainly attributed to contributions from its 60%-owned plastic product maker Rapid Growth Technology Sdn Bhd, a firm mainly involved in washroom solutions.

The group announced a net profit of RM4.97 million for FY20 ended June 30, 2020, a 18.3% decline.

The poorer full-year performance was due largely to slower air care sales to the automotive sector in the US, as production was also completely halted for one week in March and at half the usual level for the whole month of April.

Profits were further held back by one-off and additional expenses incurred during the Movement Control Order. Revenue improved to RM26.3 million from RM19 million in the preceding year corresponding quarter.

RGT’s share price rallied from 11.5 sen at the end of March to 62.5 sen at close yesterday.