Documente Academic
Documente Profesional
Documente Cultură
TABLE OF CONTENTS
Contents
Introduction
.2
Background
of
the
company
3
Awards
and
Certifications
..4
Company
Profile
5
Corporate
Structure
7
Financial
Analysis..
..8
Recent
Company
Development..
......................................19
Industry
Profile
and
Analysis
.20
SWOT
Analysis
.21
Internal
Factor
Evaluation
Matrix
..29
(IFAS)...
External
Factor
Evaluation
Matrix
(EFAS)
..30
...
INTRODUCTION
What is Strategic Management?
Strategic management involves the formulation and implementation of the major goals and
initiatives taken by a company's top management on behalf of owners, based on consideration
of resources and an assessment of the internal and external environments in which the
organization competes.
Besides that, Strategic management also provides overall direction to the enterprise and involves
specifying the organization's objectives, developing policies and plans designed to achieve these
of
GDP (Gross
demand.
Domestic
This
Product),
makes
they are
production
highly
industry
sensitive
an
to interest
important
tool
COMPANY PROFILE
HeveaBoard was incorporated in 1993 as a private limited company under the name of
HeveaBoardSdn Bhd. The Company was converted into a public limited company in 2004 and
assumed its present name, and was subsequently listed on the main board of Bursa Malaysia
Securities Berhad in January 2005.
is
listed
on
the
Kuala
Lumpur
Stock
Exchange.
The company, together with its subsidiaries, offers ready-to-assemble furniture, ranging from
storage shelves and computer tables to flexi-rack under the brand name The Collection.
It serves panel furniture, speaker boxes, and door manufacturing industries.
The companys products are exported to China, Vietnam, India, Korea, Japan, Singapore, Sri
Lanka, Philipines, Hong Kong and Taiwan.
HeveaBoards subsidiaries include HeveaPacSdn. Bhd., which is engaged in manufacturing and
trading of ready-to-assemble furniture; and HeveaMartSdn. Bhd., which is active in the trading
of particleboards and other panel boards.
The HeveaBoardBerhad Company and its subsidiaries manufacture, trade and distribute a wide
range of particleboard and particleboard-based products. HeveaBoard takes the lead in the
manufacturing of particleboard which is a reconstituted wood panel derived from rubber wood
residues, while its subsidiaries are involved in downstream particleboard based ready-toassemble furniture manufacturing, trading and distribution of particleboard and wood panel
related products.
6
1) ENHANCED GROWTH
Increase the capacity for particleboard and value added finished products
2) EFFICIENCY
3) EARNINGS
FINANCIAL ANALYSIS
Financial Ratio
135178
129632
121636
108851
102705
= 1.3 times
= 1.24 times
= 1.26 times
191401
202825
229745
Assets 422455
411400
423767
= 45.31 %
= 49.3 %
= 54.21 %
389507
372597
373049
Inventory Turnover
66893
61690
67664
Sales
= 5.82 times
= 6.04 times
= 5.51 times
22459
15477
3341
389507
372597
373049
Net Income
= 5.77 %
= 4.15 %
= 0.89 %
Current Ratio
Current Asset
Current Liability
Leverage Ratio
Debt-to-Total
Ratio
Total Debt
Total Asset
Activity Ratio
Inventory
Profitability Ratio
Sales
9
Revenue
Annual
(373049 372597)
(372597 389507)
(389507 363137)
372597
389507
363137
= - 4.34 %
= 7.2 %
Percentage = 0.12 %
Growth in Revenue
10
Current Ratio
1.31
1.3
1.29
1.28
1.27
1.26
1.25
1.24
1.23
1.22
1.21
2011
2012
2013
Current Ratio
The current ratio is the ability of the company to pay back its short-term liabilities such as
debt and payables using its short term assets like cash, inventory and receivables. It also known
as liquidity ratio, cash asset ratio and cash ratio. The current ratio is mainly used to bring
an idea of the companys ability to pay back its short-term liabilities which includes debt and
payables with its short-term assets which is cash, inventory, and receivables. This means, the
higher the current ratio, the more capable the company is of paying its obligation and debt.
According to the current ratio analysis above, we can find that HeveaBoardBerhads
current ratio has decreased from 1.26 times in 2011 to 1.24 times in 2012 which decrease of 0.02
11
Debt-to-Total-Asset Ratio
Year
Total Asset
Total Liabilities
Debt-to-Total Assets Ratio
Debt-to-Total-Asset Ratio
56
54
52
50
48
46
44
42
40
2011
2012
Debt-to-Total Asset (%)
12
2013
Although, there is decrease in its total assets in 2012 but it is only a slight decrease in
2.91%. HeveaBoardBerhad still has a strong financial standing as this can be seen in 3 years
respectively. The decrease in total debt is due to the increasing in total asset that can be cover to
the total debt and the remaining of the asset such as long-term asset can reduce its dependent on
other creditors.
Inventory Turnover
Year
Sales
Inventory
Inventory Turnover
13
2011
2012
2013
Inventory Turnover
A ratio showing how many times a companys inventory is sold and replaced over a
period. The days in the period can then be divided by the inventory turnover formula to calculate
the days it takes to sell the inventory on hand or inventory turnover days. This ratio should be
compared against industry averages. A low turnover implies poor sales and, therefore, excess
inventory. A high ratio implies either strong sales or ineffective buying. High inventory levels are
unhealthy because they represent an investment with a rate of return of zero. It also opens the
company up to trouble should prices begin to fall.
Based on the analysis, we can see that it was 5.51 times in 2011 and it aroused to 6.04
times in 2012. However, it declined to 5.82 times in 2013 but it still more than 2011. This
represents that HeveaBoardBerhad is performing well and efficient in controlling inventory
levels.Eventhough it shows decline in its inventory turnover in 2013, but in its sales and
14
2011
2012
2013
A ratio of profitability calculated as net income divided by revenues or net profits divided
by sales. It measures how much out of every dollar of sales a company actually keeps in
earnings. Profit margin is very useful when comparing in similar industries. A higher profit
15
Revenue
Revenue Growth Rate
- 4.34 %
0.12 %
7.2 %
16
2011
2012
2013
-2
-4
-6
Revenue Growth Rate (%)
The amount of increase that a specific variables has gained within a specific period and
context. For investors, this typically represents the compounded annualized rate of growth of a
companys revenue, earnings, dividends and even macro concepts such as the economy as a
whole. The use of historical growth rates is one of the simplest methods of estimating future
growth. However, historically high growth rates dont always mean a high rate of growth looking
into the future, because industrial and economic conditions change constantly.
Based on the graph, HeveaBoardBerhads revenue growth rate 7.2% in the year 2011 and
it has achieved a -4.34% in 2012. Then in the year 2013, it has demonstrated a slightly increase
to 0.12%. This shows that the companys revenue decline after have high revenue growth in
2011. It can also mean that its performance is getting decline throughout the years.
17
18
In May 2013, this company successfully obtained CARB (California Air Resources
Board) certification which complying with applicable emission standard in section 93120.2(a)
phase 2 from PT MUTUAGUNG. Lastly, in October 2011, HeveaBoard successfully
obtained ISO 14001, OHSAS 18001 and MS 1722 by SIRIM QAS.
19
20
21
WEAKNESSESS
website
3. Furniture production generates waste
THREATS
1.The impacts of GST at goods product
2.Competition from others competitors
3.Economic risk from various aspects
4. Threat from ASEAN Economic Community
2015
STRENGTHS
22
Based on CIMB Equities Research, they has advised investors to remain invested in
particleboard manufacturer of Heveaboard. They had given statement such as We like
Hevea for its strong US$-driven earnings momentum and attractive valuations. The meaning
of order in earnings momentum is to drive strong of the stock.
23
HeveaBoardBerhad Malaysia proudly receives the ASEAN Best Practices Awards for
Energy Management in Buildings and Industries for the Industry Special Submission
Category from the ASEAN Energy Awards 2014 (AEA). A sole Malaysian company who
wins the ASEAN Best Practices Awards for Energy Management in Buildings and Industries
during the ASEAN Energy Awards 2014 held on 23rd September 2014 at Don Chan Palace
Hotel, Vientiane, Lao PDR. ASEAN Centre For Energy (ACE) is an intergovernmental
organization established by Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar,
Philippines, Singapore, Thailand and Vietnam. It is guided by Governing Council composed
of the Senior Officials on energy of the ASEAN countries and a representative from the
ASEAN Secretariat.
5. Successfully obtained PEFC (Programme for the Endorsement of Forest
Certification)
HeveaBoard successfully obtained PEFC (Programme for the Endorsement of Forest
Certification) certification which complying with the good practice in the forest and to ensure
that timber and non-timber forest products are produced with respect for the highest
ecological, social and ethical standards. PEFC is the world's largest forest certification
system. Their credible standards seek to transform the way forests are managed globally
and locally - to ensure that all of us can enjoy the environmental, social and economic
benefits that forests offer.
24
According to statistics, there were about 438.93 million households in all areas,
autonomous regions and towns directly under the central government in the Chinese
mainland. Based on the assumption that people would change their home furniture once
every 10 years, around 44 million households would replace their furniture each year. So
that, Heveaboard can takes this opportunity to enter Chinas market to expand their
industry in Asia countries.
2. Exposed to new market with global trade and investment (Globalization)
Today, products are no longer made in one place from start to finish. Instead, they are
assembled over a long series of individual steps often located in different parts of the
world. The description Made in one single country is now the exception rather than the
rule. This means that we need to have a more sophisticated approach to exports and
imports
than
seeing
finished
goods
as
simply
entering
or
leaving
country.Heveaboardshould process from the beginning and make sure all the
raw materials are made in Heveaboard itself.
26
There are many advantages if Heveaboard exporting their products outside the
country. It can increase sales, increase profit and increase the production. Other than that, it
also can give improvements in performance and competitiveness. Besides, exporting also
can avoid the reduction in dependence on local markets.
3. The emergence of Next-Shoring
Next-shoring strategies include elements such as a diverse and active set of
production locations, a rich network of innovation-oriented partnerships, and a strong
focus on technical skills. The key factor on this opportunity is for low labor-costs. This is
strategy in which a company sources materials from countries with lower labor and
production costs in order to cut operating expenses. For example, this company can hire
employees with low labour costs with high technical skills such as employees from India.
THREATS
1. The impacts of GST at goods product
Even though the government claims that the GST would not hurt businesses due to
GST claimable practice, in fact it will hurt the businesses too. This is because of the low
demand in the market due to the high cost of product pass to the end consumers, the
businesses have to decrease the supply to meet the current condition of lower demand, thus
the businesses have to cut down the expenses such as labor cost due to the lower output
needed and eventually there might occur high rate of unemployment.
27
Besides, the businesses are not producing in the effective situations as they are not
maximizing the usage of the machines, rental and all these will lead them to downsize their
businesses and finally lead to the declines in a country.
So that, it can give bad impact towards Heaveaboard company. Their sales will
decrease due to low demand of customers because the high cost of raw materials.
2. Competition from others competitors
The close competitor of Heveaboard is IKEA. This is due to customer knowledge
about IKEA is more than Heveaboard. Everyone knows about IKEA products and they know
IKEA will constantly using innovations to drive costs down. Heveaboard cannot cut down
the price because they are still using high quality materials and they want to control the
quality of their products in terms of their good source raw materials.
3. Risk from various aspects
Companies are exposed to economic risk from various aspects of the overall
economy. Weakness in the economy, specific markets, industries or demographic groups can
cause sudden drops in demand for particular goods or services. Political risk represents the
financial risk that a country's government will suddenly change its policies. This is a major
reason why developing countries lack foreign investment. For example, if Malaysia increase
exports tariffs it will affect the company to penetrate their product globally.
28
29
Strength
Weight
Rating
Weighted
1.
0.20
score
0.80
2.
manufacturer.
Strong US$ driven earnings momentum and
0.15
0.60
3.
attractive valuation.
Successfully obtained PEFC(Programme for
0.10
0.30
4.
0.10
0.30
0.10
0.30
Weight
Rating
Weighted
Industries.
Good sales record in HeveaBoardBerhad
No.
Weakness
1.
2.
0.10
0.15
1
2
score
0.10
0.30
3.
website.
Weak at online purchasing products which is
0.10
0.20
e-commerce.
TOTALS
1.00
30
2.90
Opportunities
Weight
Rating
Weighted
1.
0.25
score
1
0.15
0.60
0.10
Weight
2
Rating
0.20
Weighted
Asia
2.
3.
No.
countries
since
living
conditions
continues to improve.
Exposed to new market with global trade and
investment (Globalisation)
The emergences of Next Shoring
Threat
1.
0.10
score
0.20
2.
3.
4.
0.10
0.15
0.15
1
2
3
0.10
0.30
0.45
2015.
TOTALS
1.00
31
2.55
STRENGTH
WEAKNESS
EFAS
Furniture production
generates waste.
No price placed on
products in companys
website.
Weak at online
purchasing products
which is e-commerce.
OPPORTUNITIES
SO
WO
High demands of
furniture stocks in
West and Asia
countries since living
conditions continues
to improve.
Exposed to new
market with global
trade and investment
(Globalization)
The emergences of
Next Shoring
THREATS
ST
WT
2. Make an attractive
website and state the
32
other countries.
Economy risk from
various aspects.
Threat from ASEAN
Economic
Community 2015.
TOWS MATRIX
The Threat, Opportunities, Weaknesses, Strength (TOWS) matrix is the most widely uses as
strategic planning matrix by company. The strategic are divided from an organizations external
opportunities or threat and internal strength or weaknesses. The company needs to use its
strength to capitalize an opportunity and improve upon weaknesses and avoid threat. There are
four strategy quadrants labeled SO, WO, ST and WT which is a strategy that would benefit for
the company.
Strenght and Opportunities
1. Use their current position to promote more the product.
HeveaBoardBerhad has largest integrated particle board manufactured and that will give
the opportunity to the company to promote their company. This is because, the company
does not have a strong brand name yet although it already success in board manufacture.
As we know, strong brand name is the most important in doing business to make
customer aware with our company.
33
35
38
CONCLUSION
As conclusion, we had choice HeveaBoardBerhad as our company for this project and
HeveaBoardBerhad Malaysia is a manufacturing company for wood that based in Malaysia
which is in Seremban. There are few competitors for this company that producing panel boards
which are Mieco Chipboard Berhad, JayakuikSdnBhd and also Segamat Panel Board. All of
them are a direct competitor and for indirect competitor is IKEA because IKEA sell the same
product but the wood is different. HeveaBoardBerhad had a lot of certificate and it is the largest
integrated particle board manufacturer. Also, HeveaBoardBerhad is the first company that got the
JIS Certified Particleboard Manufacturer. Therefore, HeveaBoardBerhad is popular among
manufacturer market but not among customer because lack of marketing.HeveaBoards
subsidiaries include HeveaPacSdn. Bhd and HeveaMartSdn. Bhd. which is engaged in
manufacturing and trading of ready-to-assemble furniture and also active in the trading of
particleboards and other panel boards. In this project, we had found the SWOT analysis for the
40
REFERENCES
http://www.kronostar.com/eng/Company
http://www.heveapac.com.my/products.html
http://www.facebook.com/l.php?u=http%3A%2F%2F2015.miff.com.my%2Fabout-miff
%2Fmalaysian-furniture-industry&h=AAQGzPkDd
http://www.facebook.com/l.php?u=http%3A%2F%2Fqualityinspection.org%2Fmalaysiaproduction%2F&h=WAQEqhwwn
Kerry. K, Before You Go: Russia Travel Basics
Retrieved from: http://goeasteurope.about.com/od/russia/bb/russianbasics.htm
Waste Disposal
Retrieved from: http://www.lht.com.sg/waste.htm
Bel. B, (15 January 2015), 8Ways To Increase Your Brand Awareness In 2015
Retrieved from: http://www.eventbrite.co.uk/blog/8-ways-to-increase-brand-awareness/
IKEA services
Retrieved:http://www.ikea.com/ms/en_MY/customer_service/ikea_services/childrens_ser
vices/index.html
Earnings Momentum
Retrieved from: http://www.investopedia.com/terms/e/earnings_momentum.asp
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