NEWS

12/12/2007

K-One Banks On Large Contracts

K-One Technology Bhd expects financial year ending Dec 31, 2008 (FY08) to be “rosy” on the back of bigger contract value, said chairman Edwin Lim Beng Fook.

He told StarBiz that the company had completed the design and development (D&D) of some key projects, which would go into mass production next year. “Since we've secured the D&D contracts, the manufacturing should also be given to us,” he said, adding that since these were high volume products, their contribution to revenue would be substantial.

The company expanded capacity in its Ipoh plant this year, which added 60,000 sq ft to the existing 30,000 sq ft.

The extra space would allow the company to triple the production lines to 21 from seven currently.

Manpower had also doubled to the present 100 full time staff and this excluded those involved in factory operations, Lim said.

“Size is very important in our type of business as it gives us bargaining power with suppliers and confidence from customers,” he added.

K-One gained experience in mass production when it made the desktop charger, which was one of its main earnings contributors, he said, noting that financially, it raised some RM16mil for working capital from the rights issue earlier this year.

“The human resources, production capacity, technology, finances and experience in mass production have put us in place for a quantum leap next year,” Lim said.

Exports to the US, which now contribute 5% to 6% of revenue, are anticipated to chart double-digit growth as some of the D&D projects were from that market.

On concerns of the economy slowing down in the US, Lim said it was unlikely to impact K-One significantly as the market was still a small portion of the group's revenue.