2025 New Year Message from Group Executive Chairman
In 2024, our business operations continued to soldier on with the economic and trade challenges, both globally and locally. Our Steel Division posted lower sales and revenue due to limited local demand and overcapacity in the industry, whilst continuing to focus on improving operational efficiencies and containing costs.
The Government's measures to impose a 2-year moratorium on expansion in the steel-making industry effective 15 August 2023 and establish an Independent Steel Committee to look into the issues affecting the industry will provide the necessary policy intervention to ensure the sustainability of the industry and fair trade in the face of worldwide overcapacity, push for greater R&D and green technology adoption, and need for financing and upgrading of workers' skills.
Our Mining operations were hampered by heavy rain due to weather conditions at its site in Banting last year which we are working to recover by the first half of this year whilst exploring new resources in other states as well as overseas.
The property sector saw increased demand for all types of properties with industrial properties fueled by the growth in data center investments and the manufacturing sector. Our Property Division is expanding its industrial park portfolio with our flagship offering being the ongoing Banting Industrial City (BIC) in Selangor. It has a mix of medium and heavy industrial land, commercial land and shop-offices catering for high technology and heavy manufacturing industries. We are also developing several non-industrial projects in the Klang Valley and Melaka with plans for future developments especially for quality housing and commercial hubs, in these states including Negeri Sembilan.
Parkson operates a total of 82 stores with 37 stores in Malaysia, 44 stores in China and one supermarket in Laos. In 2024, we re-launched our Sunway Carnival outlet in Seberang Jaya in Prai, Malaysia after 3 1/2 years of renovation in line with the mall's total renovation and expansion. During the same year, we also witnessed the opening of our Guanhua Supermarket in Mianyang City, China. The Group remains optimistic of the overall retail prospects with the improved consumer sentiments and tourist arrivals in line with the extended visa-free travel between Malaysia and China. Parkson will continue to work with our business partners to offer the latest fashion and lifestyle products for customers.
Parkson Credit, under our Consumer Credit Financing Division, has established itself as one of the leading motorcycle financiers in Malaysia. The successful launch of its RM1.0 billion Sukuk Bond under HSBC Malaysia's asset-backed Islamic Medium-Term Notes Programme in December 2024 marks a significant milestone, paving the way for accelerated business expansion. Building on this momentum, the company continues to demonstrate consistent growth while contributing positively to the Group's top and bottom lines.
Our other businesses namely SECOM which offers electronic and physical security services, POSIM which supplies building materials and automotive and industrial lubricants under the HI-REV and T-TRAX brands, and LIKOM in Melaka which provides mechanical and electronic manufacturing services, are continuing with their stable operations.
Bank Negara forecasted that Malaysia's economy will expand by 4.5% to 5.5% in 2025 `driven by robust expansion in investment activity, continued improvement in exports, and resilient household spending'. Sector-wise, the economy is expected to be spurred by construction benefiting from infrastructure and data centre projects; utilities seeing gains from rising demand alongside investments in renewable energy and data centre development; plantation, driven by strong palm oil demand and stable crude palm oil prices; manufacturing especially the electrical and electronics sector with greater exports; banking which is poised to grow due to healthy loan growth, rising consumption and capital market activities; and tourism with increasing tourist arrivals which augurs well for tourism-related activities such as the retail, transportation and hospitality sectors.
Household spending or private consumption which is one of the key growth drivers, will see an increase with the hike in minimum wage from RM1,500 to RM1,700 a month with effect from February 2025. However, spending may be curbed due to the proposed increase of 14.2% in base electricity tariff which will impact industries too, and the proposed removal of RON95 petrol blanket subsidy to be replaced by a targeted subsidy, both to be effective in the second half of 2025.
On the downside, economic growth could also be affected by the external uncertainties of geopolitical tensions especially in the Middle East which may disrupt critical oil and gas supplies leading to volatile commodity prices and supply chain disruptions, US President-elect Donald Trump's tariff policies and global monetary policies and prolonged US-China trade disputes. The slowdown in major economies will also affect our external trade and exports.
I wish to express my sincere thanks to all staff for your continuing hard work and dedication throughout the years and call upon everyone to be prepared to meet the challenges ahead.
My appreciation goes to all our customers, business partners and associates, financiers, shareholders, directors and the government authorities for their continuing support and cooperation.
I wish everyone well in the new year and take this opportunity to extend festive greetings to those celebrating the Lunar New Year.
TAN SRI DATUK SERI UTAMA WILLIAM CHENG
GROUP EXECUTIVE CHAIRMAN