Mainboard-listed Hafary Holdings, which supplies premium tiles, as well as other fittings, has expanded its operations to include manufacturing capabilities on Dec 15.
The expansion was made through the incorporation of a new joint venture company (JVCo), International Ceramics Manufacturing Hub Sdn Bhd with Guangdong ITA Element Building Materials Co. Limited (ITA) and CNA Pte Ltd, an established premium tile manufacturer.
According to a release by Hafary, the new JV will enable the group to “move upstream” and overcome supply constraints. It will also leverage on its majority shareholder, Hap Seng Consolidated Berhad’s MML brand, as well as Hap Seng’s distribution networks to grow sales in Malaysia and the regional export market.
Through the JV, the group will lease two manufacturing plants in Johor, Malaysia, from Hap Seng Group.
CNA will also bring its years of experience (over 13 years operating manufacturing plants in China and over three years in Malaysia) into the JV.
“Coupled with ITA’s fine expertise in tile design patterns, Hafary is on track to become a key player in Southeast Asia’s ceramic industry,” reads the statement.
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To further build on their core capabilities, Hafary has plans to invest approximately 40 million ringgit ($12.3 million) to ramp up the plants’ production capacity from 16,000 sqm to 41,000 sqm per day.
In addition to helming Hap Seng Group’s ceramic business division, Hafary will also distribute the MML brand of ceramic tiles through its wholly-owned subsidiary Hafary Trading Sdn Bhd (HTSB) for retail, project as well as export markets.
The undertaking of the distribution will allow Hafary to have greater control over its supply chain and fully capture MML’s steadily growing demand. On this, Hafary will also be better equipped to take on larger project opportunities.
As at 2.58pm, shares in Hafary are trading flat at 19 cents.
