KUALA LUMPUR (March 15): KINSTEEL BHD [] is streamlining its downstream business operations, especially its 51% owned Perfect Channel Sdn Bhd, which has been affected by weak steel prices and rising material costs.
Kinsteel said on Thursday that Perfect Channel’s core activities were manufacturing and trading of steel beams, bars, wire rods and other steel products.
However, over the past few years, Perfect Channel was affected by weaker-than-expected global steel demand and rising material costs and also higher transportation cost for the raw.
“Hence, the streamlining of business operations is a strategic move to consolidate Kinsteel group’s downstream business which is in line with Kinsteel group’s on-going cost savings exercise across its industry value chain,” it said.
The streamlining, it said, would reduce the group’s turnover but it would not have a material adverse impact on the profitability in the future.
“Hence, the group expects a one off cost of approximately RM9 million to compensate its existing staff and workers affected by the streamlining of business operations,” it said.
Kinsteel said on Thursday that Perfect Channel’s core activities were manufacturing and trading of steel beams, bars, wire rods and other steel products.
However, over the past few years, Perfect Channel was affected by weaker-than-expected global steel demand and rising material costs and also higher transportation cost for the raw.
“Hence, the streamlining of business operations is a strategic move to consolidate Kinsteel group’s downstream business which is in line with Kinsteel group’s on-going cost savings exercise across its industry value chain,” it said.
The streamlining, it said, would reduce the group’s turnover but it would not have a material adverse impact on the profitability in the future.
“Hence, the group expects a one off cost of approximately RM9 million to compensate its existing staff and workers affected by the streamlining of business operations,” it said.
