Set out below are our competitive strengths which we believe allows our Group to compete effectively within the industry we operate in:-

Integrated building materials provider

One of the competitive strengths of our Group lies in the integrated nature of our businesses as we manufacture, distribute and deliver a wide range of building materials for the building industry.

We are an integrated building materials provider with the ability to supply a comprehensive range of building materials. Building materials manufactured by us include AAC and precast concrete products, as well as wire mesh and metal roofing systems. As for our distribution business, we rely on external manufacturers supplying the entire range of products needed by our customers.

All our products are distributed throughout our distribution channel located in various locations in Peninsular Malaysia and to various categories of customers. The diagram below shows the distribution of our products from our respective subsidiaries to the different categories of customers.

Together with our in-house manufactured products and other products which we source from third-party suppliers, we are now able to supply the majority of products required by the building industry, servicing our customers the majority of whom are retailers, contractors, industrial users and developers. Distribution activities of our products are supported by our strategically located warehouses and/or offices throughout Peninsular Malaysia to service and cater to the needs of our customers.

Our logistics services business segment is involved in transporting bulk and bag cement for local cement manufacturers (e.g. YTL Cement Bhd and Permasaran Simen Negara Sdn Bhd) to their customers throughout the country. Bulk cement is transported by specialised cement tankers that are owned and operated by external parties, whereas bag cement is transported by normal road trucks which are also owned and operated by external parties.

Nationwide offices and warehouses

Our Group has 10 branch offices located in cities and major towns of every state in Peninsular Malaysia except Perlis. In addition, we have 5 warehouses located in Kuala Lumpur, Terengganu, Kelantan, Kedah and Pahang. This network of branches brings us close to our customers - allowing us to supply and service them efficiently. This wide network has also enabled us to build up a 4,000 strong customer base, half of which are active.

Our strategically located and well-stocked warehouses are also equipped with our own fleet of lorries, enabling us to serve our customers quickly. These warehouses can also break up large consignments of goods delivered by the factories into smaller loads which are then sold to those customers that need them in smaller quantities.

Established market reputation and broad customer base

Over the past 20 years since its inception, our Group has established a reputation as a major distributor of building materials in Malaysia. This is evident as our customer base is 4,000 strong with 2,300 active customers. Active customers refer to customers who make regular purchases from us.

This market reputation and large customer base has resulted in better purchasing terms from our suppliers compared to smaller players and has together with long established track record enabled us to benefit from business referrals from our satisfied customers.

Strong and experienced management

Our Group’s past success and future growth have been and will continue to be influenced by the leadership of our team of experienced directors and key management.

Our founder and Deputy Group Executive Chairman, Datuk Chiau Beng Teik has 40 years of accumulated experience in the building materials industry. He plays an instrumental role in steering our Group’s growth strategies and business directions and amongst his contributions was the rapid expansion of our Group’s business from a single outlet in Alor Setar to multiple branches throughout Peninsular Malaysia.

Our Group has also benefited from the combined leadership and experience of our senior management such as Chiau Haw Choon (Group Managing Director) and Lee Hai Peng (Executive Director cum Chief Financial Officer) supported by the respective business unit heads namely Lok Boon Cheng (Metex Steel), Ng Wai Luen (Starken AAC and G-Cast Concrete), Tan Cheak Joo (PP Chin Hin) and Tan Ming Hong (Chin Hin Concrete) who bring with them their experience and also network of business contacts built throughout their years in the industry.

Our heads of business units are in turn supported by experienced managers and other technical personnel to ensure the smooth running of their respective operations.

Production efficiency and quality products

Since the beginning of our venture into the manufacturing business, our management has adopted a strategy to produce quality products in an efficient manner. With this our management committed itself by selecting only technically advanced plants and equipment for our AAC products and wire mesh factories.

This is most evident in Starken AAC’s plant, which uses one of the latest machineries and technologies supplied by Wehrhahn GmbH of Germany, which was chosen specifically for its efficient and highly automated production capabilities which require far less labour input.

Metex Steel on the other hand invested in EVG wire mesh machineries and equipment from Austria. EVG wire mesh machineries are fully automated and flexible, using latest technologies which mitigate potential hazards on the work floor without sacrificing efficiencies and quality end products.

* Please read this section in conjunction with Section 6.14 from page 138 to page 141 of Chin Hin Group Berhad’s Prospectus dated 18 February 2016.