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Monday, August 25, 2014

Jag expects to see 10% growth next year (Star)

Electronic waste-recycling company Jag Bhd expects to match its financial performance achieved in financial year ended Dec 31, 2013 and eyes a further 10% growth in topline in the following FY15.

“We see a better financial situation next year. While for this year, we should be able to achieve what we achieved last year and I am fairly confident of this,” executive director Datin Stacey Tan told StarBiz.

“We are in the midst of securing new suppliers now – and this is all the hard work we put in now (this year). This is the first year where Jaring Metal Industries Sdn Bhd (JMI) is being listed and it is the first time where people in the industry would have heard about us,” Tan added.

JMI, which was privately held before, in the beginning of this year completed a reverse takeover (RTO) process of Jag, which was formerly known as Infortech Alliance Bhd that is listed on the Ace Market of Bursa Malaysia.

The enlarged group today saw almost its entire revenue contribution from the wholly owned JMI, said Tan, adding that the company still intended to retain the information technology side of the business as it still had a strong client base there.

In its FY13, Jag recorded a 8.14% growth in its topline to RM135.7mil while net profits dipped slightly to RM7.88mil from RM8.5mil in FY12 due to an increase in costs and a loss from commodity hedging.

Jag, which is based in Shah Alam, is confident of increasing returns as the waste-recycling industry in the country is regulated by the Government.

The company noted that there were presently 18 companies that had been granted licences in the full recovery category of waste recycling in Malaysia and there are four of such companies in Selangor.

Jag also has major multinational companies in the semiconductor manufacturing industry as its clients or suppliers, which are renewable on a contract basis for up to three years.

The company’s facility today processes mainly 80% of e-waste that would eventually be converted into copper. ..

“As it is, we are the only listed company doing e-waste recycling and we hope to eventually branch out and this can be seen with our efforts by signing a memorandum of understanding (MoU) with SWT International Sdn Bhd to process medical waste,” Tan said.

The MoU for a joint venture, which is due next month, would be extended for a further six months pending further finalisation of other finer details and the like, added Tan.

“This will give us room to ensure that we are very clear before we go straight into the joint venture. Although I see very high chances but we do need to be very clear first before we pump a whole lot of money into it (the venture),” said Tan.

The company had seen keen interest from several bankers and funds of late and there was some kind of excitement and curiousity invoked when the recycling industry is mentioned.

Other recyclers which are publicly listed today are Ace Market Hiap Huat Holdings Bhd and Tex Cycle Technology (M) Bhd; and the SGX Listed Metech International Ltd.

Meanwhile, with the help of an reinvesment allowance grant from the Government, Jag recently bought a new machine that is imported from Australia which allows copper and nickel to be exctracted directly from solid and liquid waste.
“This machine will increase efficiency and productivity as we do not need to use the furnace that has to be fuelled up every now and then. We use chemicals instead to extract these metals,” said Ng, who took StarBiz on a tour of the facility recently.

The new machine, which would go into operations by the end of the year, would enable it to increase its total processing capacity by 10% to 1,100 tonnes per month.

Jag had in April also completed the acquisition of neighbouring piece of 1.06 ha freehold land that was mostly capitalised into its balance sheet.

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