NTPM – Investors

The Managing Director's Outlook

30th April 2006

The revenue of NTHB and its subsidiaries increased to RM237 million from RM216 million in the preceding year. We continued to enjoy yet another year of growth whereby sales increased by 9.5%, in which the sales of tissue products contributed a growth of 6.3%. In terms of market share, the local sales which grew 3.4% has accounted for 67.1% of total sales while the export sales growth of 12.7% has captured 32.9% market share.

The personal care segment has increase by 34.5% compared to the previous year. Furthermore, in July 2006, a better technology production line will be added. Hence, our new product which incorporates more features is not only competitive in quality but due to higher production capacity, we are price competitive too. And considering the short span of time of the diaper products, we have yet to achieve respectable sales revenue.

Quality Management System

NTHB is committed to continuously improve the quality of its products. The quality programs which had been implemented over the past years are continuously reviewed and improved to enhance the quality management system. Moody International Certification successfully completed the surveillance audit for ISO9001:2000 Quality Standards on 18th & 19th April 2005 for three companies; NTHB, NTPM and NTE and on 27th June 2006 for NTPC.

Future Challenges

With an additional 100 metric ton a day tissue paper output, NTPM has the capacity to utilize some of these facilities to produce other types of paper products. We have successfully converted some existing tissue paper machines to produce wet crepe hand towels and other paper products. These products have not only increased the existing product range but will become additional revenue sources for the Group.

On the other hand, the rising costs of many components of raw materials as well as fuel and utility have imposed tremendous challenge to the Group. As many of these costs cannot be contained by the Group, thus whenever possible, the management will continuously seek to improve the production facilities and implement efficient methods in reducing production costs to counter and offset the higher cost of doing business.

As a further step in production cost reduction, the management is conducting a research in the production of pulp from local waste materials. This will significantly reduce the cost of raw materials as pulp fiber is a main raw material used in the production of tissue paper.

NTPM continues to create awareness on the usage and applications of tissue paper products through the various media channels. In line with our sanitary napkin products, health educational talks are being carried out in both primary and secondary school nationwide.