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Published on December 21, 2007

"We hope to double the revenue from the downstream division to 50 per cent in FY09, and in subsequent years," said managing director Derrick Tan.

Speaking after the company signed an agreement to buy a 55-per-cent stake in Labels Network for 4 million ringgit (Bt36.7 million) in cash on Tuesday, Tan said the downstream activities in Malaysia and Thailand would add substantially to the group's revenue, on top of the bid it had submitted for a project to supply tracking systems to an airport in Thailand.

Labels Network was represented by CEO Wan Kok Weng.

"We expect to finalise the airport deal by next year, after the Thai election this month," Tan said. Yesterday's acquisition deal involves Labels Network providing a minimum profit guarantee of RM2.25 million in two years.

"Labels Network's technological know-how and experience will provide us with an ideal platform for product development efforts into a wider range of bar-code labels and new technologies, such as radio frequency identification," Tan said. "We will focus on the industries of fast-moving consumer goods, retail and healthcare for our Thailand market."

On Tuesday, Grand-Flo's Thai associate, Simat Technologies, also signed an agreement to set up a 60:40 joint venture in Bangkok with Labels Network to produce bar-code labels. The two firms will jointly invest Bt12 million in the plant, Tan said, adding that Grand-Flo hoped to cater to its existing as well as new customers in Malaysia and Thailand.

Labels Network makes a wide range of self-adhesive label stickers in Malaysia, including bar codes, thermal transfers and security labels. It has customers from multinational companies in various industries, such as food and beverage, consumer goods and electric products and electronics. 

The Star

Asia News Network

PETALING JAYA, MALAYSIA