Lee Kee Group, a major supplier of metals to China’s die-casting industry, says that some of its customers are developing “next generation” automated factories in Southeast Asia, a boost for its business in the region.
Lee Kee, which handles aluminium, zinc, nickel, copper, stainless steel and tin wire, set up an office in Singapore last year to expand its business in Southeast Asia as Chinese die-casters cut costs by shifting production abroad.
“(Chinese die-casters) are putting a lot of emphasis on the automation process (in Southeast Asian factories), and upgrading their designs,” Lee Kee Group CEO Clara Chan told Reuters in an interview on Monday.
“That’s why we have good confidence in Southeast Asia’s market development. If (a company) wants to invest in technology and automation, they have to have a long-term view on their business because automation costs money.”
Chinese die-casters, which churn out everything from toy cars and fashion accessories to household hardware have been setting up production lines in places such as Thailand, Vietnam, Indonesia and Malaysia. In die-casting, molten metal is poured into a mould to make a product.
Lee Kee Group, a subsidiary of Lee Kee Holdings, also includes a futures brokerage and a consultancy, as well as alloying and assaying arms.
It said earlier this month that it expected full-year attributable profit of HK$90 million ($11.47 million), more than double the year before, mostly due to an increase in zinc prices and higher revenue from its alloy and assaying businesses.
Chan said her customers were showing more interest in the chemical composition of metal products, looking at different qualities that could impact finish and strength, or that could reduce waste in the manufacturing process.
“We believe that the market, instead of just concentrating on the physical performance, they are also concerned about the chemical composition. That’s how we got the idea to set up the consultancy,” Chan said.
“Our consultancy suggests ... speciality alloys that fit their (a customer’s) product designs and their physical requirements ... But our core strength is alloying so if they require speciality materials with different functions, then we can make that.”
The process for new product development has also become much faster, as manufacturers are able to track trends digitally, Chan said. ($1 = 7.8494 Hong Kong dollars) (Reporting by Melanie Burton and Tom Daly in Hong Kong; Editing by Joseph Radford)