Econframe acquires aluminium fabrication business to diversify company profile

On January 18, Econframe Bhd declared a company expansion phenomenon through which it wishes to diversify its operations. These two recent acquisitions are Trans United Sdn Bhd (TUSB) and Lee & Yong Aluminium Sdn Bhd (LYASB).

Econframe promptly took over 65 per cent equity interest in LYASB, which is fundamentally responsible for aluminium fabrication works like mounting of aluminium glazing, glass solutions and façade instalments consisting of aluminium windows and glass doors.

The enterprise also acquired a 100 per cent equity interest in TUSB, in consideration of the land on which the LYASB unit is situated.

Lim Chin Horng, the managing director of Econframe, is optimistic about the company's business opportunities as the recent diversification might result in augmented growth, which will eventually influence its already notable presence in the industrial sector. 

"We have the expertise in terms of door set in the market, and we currently have 700 to 800 customers, so we want to let LYASB to tap into this segment...that is the main purpose of these acquisitions," Horng explained.

"In the first two years, we are probably looking at about RM60 to RM80 million in revenue from LYASB," he went on to illustrate the company's proposal in the public statement addressed to the press.

He also mentioned that LYASB has agreed to provide a profit guarantee of RM4 million annually over the upcoming three years.

"Our current order book is about RM90 million, which is going to last us for about one-and-a-half years," he laid down solid calculations.

Lim Chin Horng also added that the procurement of LYASB and TUSB will aid in enhancing the group's supply index in regard to glass items, façade solutions and aluminium glazing.

"We believe that this decision to grow our company will highlight synergistic investment for our company as well as serve as a platform for us to capitalise on LYASB's expertise," he made observations.