Welcome To YLI Holdings Berhad

YLI Holdings Bhd sees a bright future for its ductile iron pipes with the government plans to lay new water pipes and further reduce non-revenue water by 2005 and 2015 respectively.

Its group-managing director Loh Yok Yeong told Star Business that according to the Malaysia Water Industry Guide 2002, the government planned to lay another 6,700 km of new water pipes in the country in 2005.

The government also aims to cut down non-revenue water to 20% by 2015 from 40% in 2002.

In anticipation of the move by local water authorities to replace aging water pipes the group had recently upgraded its average production capacity to 50,000 metric tones from 30,000 metric tones previously. The group invested RM30mil in the upgrading exercise.

"The government's objective of laying new water pipes and lowering the rate of non-revenue water means better business for companies involved in the production of supply pipes"

"As YLI is the sole manufacturer of ductile iron pipes in the country, it would mean that its share of supplying ductile iron pipes would also increase correspondingly."

"For the year ending March 31 2002, YLI produced between 30,000 metric tonned and 35,000 metric tonned of ductile pipes.

"We aim to produce between 40,00 and 45,000 metric tones next fiscal year," he added.

YLI's turnover for the year ending March 31 was RM 92.1mil, an increase of 20.27% over the preceding year.
The group profit after tax increased by 19.48& to RM19.6mil.

"For the past five years, the group registered an average turnover growth in excess of 20%," he said.

Loh said the key mission of the group now was to find a way to mass-produce quality ductile iron pipes cost effectively.

"To attract local water authorities to use ductile iron pipes, we have to find ways to further lower our cost of production to enable us to sell competitively.

"We have expanded our team of engineers to work on achieving the goal of producing cost effectively.

"Once this goal is achieved, we will be in a strong position to compete with our oversea rivals when the World trade Organisation agreements come into effect in 2005," he added.

Loh said that use of ductile iron pipes to replace the old asbestos water pipes was becoming increasingly acceptable by the local water authorities.

"It is becoming more popular now as local water authorities are aware that ductile iron has longer life span, has the ability to withstand vibration in an urban development area, and easy to install and maintain.

"Since 1999, YLI supplies per annum about 20% of ductile pipes used by local water authorities in the country.

"For example, out of the 5,082km of water pipes installed in the country from 1999-2000, 977km, representing approximately 20%, were ductile iron pipes supplied by YLI.

"Prior to that period, we supplied less than 10%," he said

The YLI group started off as Yew Lean Foundry & Co in 1966 in Jalan Jelutong as a cast iron foundry firm manufacturing internal plumbing system, manhole cover, and fittings for water works.

"My father, Loh Eng Kim, now 65 years old, started the company with two other partners, an investment of RM15,000, and 12 employees.

"In the mid-1980s, we diversified into manufacturing of cast iron pressure water pipes," he said.

In 1988, Loh's father decided to venture into manufacturing of ductile iron pipes for water supply.

"We noticed that the local water authorities in developed countries such as Japan and Europe were increasingly favoring the use of ductile iron pipes for water supply. "In Malaysia, the existing asbestos water pipes laid during the colonial periods was getting old and causing leakages. "We realise that there would be a demand from local water authorities to replace such out-worn pipes. "Furthermore, there was also no ductile pipes manufacturer in the country yet. The ductile iron pipes available then were imported from overseas," he said.

Loh said it was not easy for the company to venture straight into the ductile iron pipes producing business. "Firstly, the company has limited resources then and was unable to purchase the necessary machinery and equipment to start immediately production. " We invested in a team of research and development engineers to develop our own machinery and equipment to produce the ductile iron pipes. "It took us about five years and several million ringgit to complete the research and development for such machinery and equipment," he said.

Loh said the company entered into the commercial production of ductile pipes in 1993. "We were able to produce about 10,00 metric tonnes per annum initially," he added. Loh said in 1997, when the company was listed in the KLSE second board it spent about RM18mil for the acquisition of a German-made machinery, which is capable of producing about 30,000 metric tones per annum.

YI, currently with a paid up capital of RM62.1mil, was transferred to the KLSE main board in Jan 2001.

The group's manufacturing activities are being carried out in its plant, which employs about 200 workers, in Prai Industrial Estate.