Singapore-based Memtech International has more than doubled its market value in the past year thanks to tie-ups with the likes of Tesla . The manufacturer is a key supplier to Musk’s pioneering auto company, making plastic components for its battery packs. It’s a far cry from just five years ago, when the seismic shift in the phone industry wrought by the advent of touch-screen devices saw Memtech suffer two straight years of losses. Started by Chuang’s father in 2000, the company had been making millions churning out the plastic keyboards used in mobile handsets produced by Nokia, Motorola and Ericsson. “That put the company immediately into a crisis and there was no way back,” the 42-year-old executive director of the company said in a recent interview. “The easiest way out was to use the money to invest in a totally different business but the existing equipment would become obsolete.” Chuang knew he had to reinvent Memtech. Giving himself two years, he looked for ways to use his existing production lines.
It was during a conference held by a German customer when he realised that he could easily re-purpose his facilities to make automotive parts.
“We did some research and we found there was a trend of putting more plastic in the car to replace the metal parts, to make the car lighter, more fuel efficient and protect the environment,” Chuang said. “We identified a whole list of potential customers.” The executive opened offices in Germany and Michigan, close to potential clients, and started building prototypes and giving out free samples. Today, Tesla accounts for about 3 percent of Memtech’s revenues, according to CLSA. So far, investors like what they see. The stock is near its highest since 2006, reached in January this year, having surged 128 percent in the past 12 months. The company now has a market capitalisation of about $156 million, four times the $41 million in 2012. “We like the company on strong returns on capital and cash flows,” Kenneth Tang at Nikko Asset Management Asia said.
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