Frontken Corporation Berhad 200401012517 (651020-T) • ANNUAL REPORT 2022 15 CHAIRMAN’S MESSAGE (CONT’D) towards the end of 2022. Plant 2 is fitted with advanced specialised equipment, comprehensive waste-water treatment and scrubber systems among others. We believe that our new “state of the art facility” will enable us to strengthen our position as one of the leading advanced high precision chamber parts service providers in the region for the next few years. With the new space, we will be able to improve on our existing process flow and efficiency of both of our facilities. At the same time, we will be introducing a new advanced cleaning technology that we have been working together with our customer over the last year in Plant 2. As mentioned in my statement last year on the next phase of expansion, we’re still continuing with our plan to acquire a new land and are actively looking for the same as we envisage that there will be more work from our customers in the future and that more space will be needed should Plant 2 runs out of capacity. Frontken Singapore (Plant 2), — Although the manpower shortages have alleviated, the lingering effect of COVID-19 on businesses and the slow down towards the end of the year have somewhat affected the sales of our semiconductor division in Singapore. To tackle this situation, we’ve made considerable effort such as streamlining our workforce, optimising our processes, and initiating continuous improvement project (“CIP”) or productivity programmes to help boost profitability of this unit. As part of the CIP, we continued to focus on our automation projects to ensure consistent output, increased efficiency and to be less reliant on manual labour. On our long-term plan, we will continue to work with our new and existing customers for new projects, processes and getting more parts qualification. With major wafer fabs companies announcing their capacity expansion coming on board in 2024, we believe our business will improve and that we will be able to benefit substantially in the very near future. Frontken Malaysia (“FMSB”), — FMSB which operates in Kulim, Melaka and Kuching improved marginally in their revenue and bottom line compared to a year ago primarily due to the increased in sales from our existing and new customers. The improved bottom lines were very much due to the continual cost saving efforts including various measures such as identifying inefficiencies in the production and streamlining inventories. As a result of the improved efficiencies, the overall margins have also improved slightly. The sluggishness from hard disk drive and photovoltaic continued to be offset by the new businesses we secured in the semiconductor and automotive industry. Our strategies have always been to continue developing new customers whilst qualifying new products to mitigate the impact of any possible threats. During the year, we continued to look out for further growth opportunities while defending our position as one of the largest semiconductor chamber process parts service providers in the country. The semiconductor industry, in particular foundries producing chips for the automotive segment are reportedly expanding their capacity to cater for the higher demand by their end customers. One of our customers has also announced the expansion on wide-bandgap technology by investing billions of ringgits in the Kulim Hi-Tech Park. Likewise, we have also made the necessary investment to meet the expected additional demand from our customer. Additionally, we have also seen our customer in Kuching undergoing some minor expansion and has increased its monthly output. We believe these positive outlooks would be beneficial to our semiconductor business in Malaysia. ENGINEERING DIVISION The Group’s engineering division that operates in Malaysia, Singapore, the Philippines and Indonesia captures a wide and growing set of support activities which includes providing extensive technical solutions, machining and fabrication, skilled manpower supply, specialised coating among others. In FY2022, many O&G companies enjoyed record-breaking profits as prices of crude oil soared. The global economy is also recovering rapidly from disruptions caused by the COVID-19. As a result, the Group engineering division which provide maintenance and repair services to the O&G industry saw a much improved revenue and PAT of 45% and 85% respectively compared to the year before mainly attributable to our business units in Malaysia and Singapore. Given the momentum we are seeing recently, we believe our engineering business will pick up further throughout 2023, barring any unforeseen disruptions in the O&G sector. TTES Frontken Integrated Services, — Our business in this unit has grown exceptionally well compared to the year before. Despite stiff competition and cost pressure, the ability to adapt and make changes to our business strategies as well as selective CAPEX investments yielded a strong result.
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