This article first appeared in The Edge Financial Daily on September 5, 2017 - September 11, 2017

KUALA LUMPUR: BSL Corp Bhd aims to be a one-stop provider for electronic manufacturing services (EMS) for its customers, providing its core competencies of in-house metal stamping, printed circuit board (PCB) assembly and fabrication and forging services.

The group is targeting a 10% revenue contribution from EMS for its financial year ending Aug 31, 2018 (FY18), according to its chief executive officer Richard Ngiam Tee Wee.

At present the group derives revenue contribution from its metal, PCB assembly and forging services separately. But with the move into EMS, the group will be a comprehensive solutions provider for its customers, who are mostly manufacturers of home electronic appliances such as televisions, air conditioners, fans, microwaves and water heaters.

Ngiam said the group has been wanting to transition into a full EMS provider for some time now.

“For us, we would like to think it is a natural [progression] into EMS as the stamping industry is already at the mature growth stage. We are already doing certain module assembly or partially completed assembly to be sent to customers to put into their final products.

“So now, we have decided to take the next step and move into the final product as well,” said Ngiam in an interview with The Edge Financial Daily.

Logistics was a deterrent in the past to its EMS venture as BSL’s factories were located in different locations. But over the years, the group has worked on centralising its operations at its factory in Batu Arang, Rawang.

“We were not terribly successful in the past as our sister companies were located in Klang and in Selayang Baru. But now, we have put them together in one location.

“We hope our customers would be able to see that from their end; product development would be easier as all these components are now in one location. For us, the [pricing] of our products would be more competitive as we can [save on transportation] costs,” he said.

BSL has moved its precision stamped metal parts unit, which was previously located in Selayang, to its Rawang factory in 2009. Its PCB assembly operations under its subsidiary Crestronics (M) Sdn Bhd in Klang were also relocated to Rawang in 2013. The group then sold Crestronics’ Klang land, office and factory to Top Glove Group last year for RM9.88 million.

In the nine months ended May 31, 2017 (9MFY17), precision stamping and tooling remained BSL’s largest revenue contributor, at about 81%, while renewable energy (RE) contributed about 14%.

“RE is something we started over a year ago as we have always been interested in products which are green. Our RE segment owns and operates solar farms, but the main business is as an engineering, procurement, construction and commissioning (EPCC) provider for any third party,” he said.

To date, its RE division has supplied and constructed 2.1mw of solar photovoltaic (PV) system. This includes a 1mw solar farm at Universiti Teknologi Malaysia’s Kuala Lumpur campus. The group owns and operates the farm under its subsidiary Matahari Suria Sdn Bhd.

It also owns 51% of BSL Eco Energy Sdn Bhd, with the remaining 49% held by its partner Eco Seido Sdn Bhd. BSL Eco Energy is a PV solar energy solution provider offering EPCC services for the full range of solar installations.

The Energy Commission (EC) in February this year announced the second competitive bidding process for the development of large scale solar (LSS) plants to be located in Peninsular Malaysia or Sabah, with a target aggregate capacity of 460mw.

The plants will be connected to the grid and successful companies will then be able to sell the energy produced to Tenaga Nasional Bhd or Sabah Electricity Sdn Bhd for 21 years.

Ngiam shared that BSL had submitted its bid for a 8mw LSS project to the EC. “The LSS has excited the market as it’s a 21-year programme where you get a constant revenue stream, but it’s also quite competitive and that’s a challenge,” said Ngiam.

For 9MFY17, BSL reported a net profit of RM2.17 million, compared to a net loss of RM694,000 a year ago. Revenue for 9MFY17 came in 27% higher at RM104.29 million. The group returned to the black in FY16 with a net profit of RM4.76 million, largely because it converted doubtful debts in the PCB segment into shares.

BSL shares closed unchanged at 51.5 sen last Wednesday with a market capitalisation of RM52.7 million. Year to date, its share price has grown 82% from 30 sen on Dec 30, 2016.