Steel Material Shortage to Fuel Chin Well’s Growth

The shortage of steel-based raw materials will fuel Chin Well Holdings Bhd’s growth in the financial year ending June 30, 2018 (FY18). Group executive director said that due to the Urban China Blue Sky project, the output of the steel-based product manufacturers would be reduced. “The affected are those equipped with old production processes, which are unable to cut carbon emissions to meet the requirements of the Urban Blue Sky Project. The market has been experiencing a shortage of steel-based raw materials for the past three months, which is expected to worsen by year-end." We expect the bulk of the orders for fasteners to come in late-2017,” she added.

Since mid-2016, the price of steel-based raw materials has shot up by 200%. The price of steel has increased to 4,100 yuan per tonne from 2,900 yuan per tonne in mid-2016. “We have adjusted the pricing of our fasteners accordingly to the hike in raw material pricing,” she said.

Two of the subsidiaries, Chin Well Vietnam and Chin Herr Industries, which contribute about 50% to the group’s yearly revenue, are expected to fuel the growth of the group for FY18. “In Europe and the United States, the demand for our value-added do-it-yourself fastener products is rising yearly, riding on a double-digit percentage growth." “In Vietnam, due to the rising sales of DIY fasteners, we are also looking at increasing the capacity for DIY fastener products,” she said.