KUALA LUMPUR (Nov 11): Security seal manufacturer Mega Fortris Bhd (KL:MEGAFB) sees minimal impact from the potential implementation of a blanket tariff of up to 10% on its products in the US, which is currently the group’s second largest market, under President-elect Donald Trump.

The company has been exporting its products to the US market “for many years and is accustomed to navigating multi-jurisdictional taxes”, including similar tariffs in Europe and other markets, Mega Fortris chief executive officer (CEO) Datuk Adrian Ng said during a press conference in conjunction with the company’s listing on the Main Market of Bursa Malaysia on Monday.  

“The anticipated 10% tariff is not a major concern for us. It’s business as usual and we are confident that any potential impact will be minimal, and we will manage it effectively,” Ng added.

The world’s largest economy will see Trump return as president for his second term next year, following the Republican candidate’s close win against Democratic candidate and former vice president Kamala Harris.

Trump has pledged during his campaign to impose a universal 10% tariff on imports, aside from a higher, 60% tariff on goods from China.

The US market has been Mega Fortris’ second-largest revenue contributor over the past three financial years, after Asia Pacific. For the financial year ending June 30, 2024 (FY2024), revenue from the US market amounted to RM44.99 million, representing 26.99% of total sales.

In FY2023, revenue from the US market stood at RM42.08 million (26.09%), and RM42.57 million (37.28%) in FY2022.

To further reduce exposure to tariff risks, Mega Fortris is also exploring plans to decentralise its pricing strategy and potentially establish a production facility in the US.

Mega Fortris chief operating officer Jason Francis-White added that a greater concern would have been potential tariff policy changes in China.

“Any increase in tariffs from China would have posed a bigger challenge, but we do not foresee significant impact from the current US proposal,” Francis-White said.

Mega Fortris currently operates in 12 countries, with sales offices across major markets, including the US, United Arab Emirates (UAE), Hong Kong, and New Zealand.

Playing cards manufacturing ‘natural progression’ (crosshead)

On its upcoming new plant in the UK, Mega Fortris said the plant would increase its production capacity to add 200 million units annually to its existing output of 570 million units.

The company is also venturing into the manufacturing of casino playing cards. This is a natural progression, as it already supplies security solutions for the casino industry, including secure boxes for playing cards, Ng said.

As such, the venture allows it to “deliver total security solutions” through a comprehensive package, “including secured cards ready for immediate use,” Ng added.

The company currently services major casino markets, including Malaysia, Singapore, Macau, and the Philippines.

Shares in Mega Fortris were flat at 67 sen earlier in the day, on their trading debut on the Main Market of Bursa Malaysia. The stock settled 1.5 sen or 2.24% lower at noon market break, after 52 million shares were traded.

At its last-traded price, the company had a market capitalisation of RM553.46 million.

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