Diversified entity D'nonce Technology Bhd, which has set aside 60% of its RM30 million capital expenditure this year to expand its Thai operations, expects to see earnings growth in its financial year ending Aug 31, 2016 (FY16) with the planned expansion.
The bulk of its Thai investments would be channelled towards expanding its contract manufacturing segment, which services the hard disk drive sector, said its group managing director Law Kim Choon.
The group also plans to diversify into food and medical equipment packaging, said Law.
"It is a challenging year this year ... but we hope our expansion plan will enable us to see growth in profit for FY16.
"We lost quite a few customers during the floods in southern Thailand (two years ago) because production was damaged, and then a fire destroyed our plant. We have managed to regain some customers since FY16," said Law after the group's annual general meeting today.
The group's largest earnings contributor now is the supply of packaging and other materials (70%), while integrated supply chain products and services make up 20% of the total, with contract manufacturing making up the remainder 10%.