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Malaysia: Latitude Tree to set up new plant in Vietnam to meet increasing demand from the US
¡¾2002.05.23¡¿

Malaysia: Latitude Tree to set up new plant in Vietnam to meet increasing demand from the US

Latitude Tree Holdings Bhd, Malaysian furniture manufacturer which has been producing dining set furniture, will start producing a whole set of furniture at its US$6 million plant in Vietnam by the year 2003. Its managing director, Lin Tzu Keng said the company is looking at market opportunities in the United States for the whole set of furniture and will include bedroom and living room sets in its product range.

Lin, back from a trip in the US, said big furniture manufacturers in the United States had indicated that they would be closing their operations soon to concentrate on the retail furniture markets due to the increasing labour cost there. They were expected to source their imports from Asian countries particularly Malaysia, China and Vietnam.

Buyers in the United States normally buy a whole set of furniture for their homes and the company felt that it was necessary to expand their product range. "Moreover, the Sept. 11 attack benefited the furniture industry because majority of the Americans are weary of travelling by air and prefer to stay at home thereby spending more money to beautify their homes," Lin said. Survey reports showed that the Americans change their furniture every two and a half years and this would translate into a good market for furniture products.

Latitude Tree exports almost all its production and 70% of it to the United States, followed by Europe (10%) Middle East (10%) and the rest to South Africa, Australia, Korea and Mongolia. The Vietnam plant in Ho Chi Minh City would start its production this July but would initially produce dining set furniture to meet the large orders as the local plants alone could not fulfill the demand. It has a full capacity to produce some US$2 million sales order per month.

In Malaysia Latitude Tree has two operating plants in Kapar and Kuala Selangor and is building another plant in Kapar. The company also has a factory in Terengganu which produces some 30% of furniture components required by its own furniture plants.Latitude Tree registered a pre-tax profit of RM 9.208 million for the half year period ending Dec 31, 2001 while its turnover stood at RM 83.829 million. It has recorded a pre-tax profit of RM 15 million for the financial year ended June 30, 2001 with a turnover of RM 150 million.