BERJAYA GROUP BERHAD - Berjaya Corporation Berhad

58
CEO’s Review Of Operations
THE NEW
VENTILATOR
ASSEMBLY
LINE IN
HARRISONBURG,
VIRGINIA.
In the United Kingdom, Dunham-Bush Ltd
closed down its Cooling and Refrigeration
Products Manufacturing operation in January
1998 in view of the insignificant and
unprofitable sales and high manufacturing costs
in the UK and Continental Europe. The
company will now focus on the production and
sale of the more profitable Heating products for
the UK and Continental Europe regions.
Meanwhile in China, we have established sales
and service offices in 10 major cities with the
headquarters based in Shanghai. Due to strong
local preference for imported Dunham-Bush
products, our joint-venture factory, Dunham-
Bush Yantai Co Ltd, suffered a loss in the
financial year 1997/98. However, we expect the
demand for our products in China to increase
tremendously for the year 1998/99 as our Yantai
factory continues to widen its product range, reengineering
and customizing its products to
suit local requirements, reducing selling prices
to more competitive levels and gain local
acceptance and acknowledgement of its
products quality, performance and reliability.
Elsewhere, we have opened sales offices in
Amersfoort, Holland and Mexico on 1 January
and 2 January 1998 respectively. Our office in
Holland is responsible for promoting Dunham-
Bush products and services into Continental
Europe including Eastern European countries
whereas our Mexican company will pave the
way for Dunham-Bush products to enter other
South American countries.
The economic crisis in the region has generally
dampened and slowed down our expansion and
growth strategy. We had implemented various
austerity measures to reduce costs and to
maintain an adequate cash flow through
downsizing our workforce, reduction in
inventory level, freeze in annual salary
increments, postponement or deferment of
capital expenditure whenever possible and a
drastic cut in business entertainment and other
selling expenses. Nevertheless, the group will
continue with its aim to become a multi-billion
dollar turnover company in the coming years as
it spread its manufacturing, sales and service
operations worldwide, upgrades its existing
plants and machineries and invests in human
resource development. With an internationally
well-known brand name and the ability to
produce high quality, technologically advanced
and competitive HVAC & R products, we are
confident that the group will continue to secure
good demand for its core products.
The textile division of the Group registered a
marked increase in profit due to better
contribution from the garment making
operation for the export market under Berjaya
Bandartex Sdn Bhd and the yarn spinning
operation of Berjaya Soutex Sdn Bhd, especially
the former. Comtribution from the fabric
making operation, Berjaya Knitex Sdn Bhd,
however was modest.
The remarkable performance in an
environment of a tight labour market facing the
industry is most commendable. The
achievement was made possible as a result of
putting in place a cost efficient system, more
sub-contracting with excellent co-ordination
and control, increasing productivity, reducing
labour dependency at the yarn spinning
operation through machine upgrading and
automation and the depreciation of the ringgit
which made its products more competitive in
the international market. During the year,
Berjaya Soutex Sdn Bhd invested about US$4
million in new machineries to automate and