Tomei Allocate RM10m for Capex
Filed Under (Market News) by Webmaster on 09-02-2009
Tagged Under : 2009, capex, Tomei
It was reported that Tomei Consolidated Bhd has budgeted about RM10mil for capital expenditure this year in a bid to expand amid the economic slowdown, the jeweller’s group managing director Ng Yih Pyng said.
“The amount allocated will be used mainly for our outlet expansion and also to improve our information technology (IT) system,” he told StarBiz in an interview.
Ng said that Tomei was expanding despite the economic slowdown because “as a retailer I cannot be sitting around and doing nothing.”
“Judging by current sales, we are not so badly affected possibly due to the festive season,” he said. “Gold and jewellery make good investments now as gold prices have gone up while interest rates are going down.”
Ng Yih Pyng
Elaborating on Tomei’s expansion plan, Ng said the group did not have a specific number of outlets that it aimed to set up.
“We do not open new outlets for the sake of it. We look at the viability, financial outlook and capacity of the outlet,” he said.
Tomei, which has been achieving double-digit annual growth for the past few years, is confident of maintaining its turnover and achieving a slight growth in net profit this year, according to Ng.
For the year ended Dec 31, 2007, Tomei made a net profit of RM12.6mil on revenue of RM223.8mil. For the nine months ended Sept 30, it recorded a net profit of RM14.7mil against RM8.7mil in the previous corresponding period.
Ng said a new Tomei outlet cost RM2mil to RM4mil, with jewellery making up the largest cost component.
Tomei currently has more than 55 retail outlets under the Tomei Gold & Jewellery, My Diamond, T.H Jewelry and Le Lumiere brands.
The group also has five outlets in Vietnam and six in China.
“We already have a presence in all major shopping malls in Malaysia but we are still looking at opportunities to reach our customers,” Ng said, adding that the group was currently in talks with a few malls for its expansion.
Tomei is also looking at consolidating some of its non-performing stores, which account for less than 10% of its total retail outlets.
“We might close down or relocate outlets which are not performing but we are not retrenching our staff even if we decide to close these outlets,” he said, adding that the group would not franchise its outlets locally.
Tomei is also building up a team of IT personnel this year. Previously, the jeweller’s IT system was managed by its vendor.
“We are not latecomers in adopting IT but we are putting in place a more powerful team. We have already invested close to RM1mil to upgrade our IT system.
“We can still manage our existing outlets and run our business normally but as we expand, we need to build up a team to help us be more efficient,” Ng said.
