MARC has assigned a rating of A+ID/ Marc-2ID to Goodway Integrated Industries Berhad’s (Goodway) RM80 million Partially Underwritten Murabahah Notes Issuance Facility / Islamic Medium Term Notes Programme, reflecting the Group’s position as a leader in the formulation and development of various rubber and technical compound products in Malaysia; wide network of clients in both the local and overseas market; potential growth in the retread industry, promising steady income growth; and commendable financial position characterized by improving revenue trend and debt level.

With a market share of approximately 30%, Goodway is principally engaged in the manufacturing and distribution of hot and cold-cure process rubber and retread related products. The Group supplies an impressive range of tyre retread materials and high quality technical rubber compounds to leading retreading operators, new tyre manufacturers and international companies dealing in various rubber related products, both domestically and to the export market. Besides manufacturing rubber compound products, the Group also provides tyre retreading services, managed through its wholly-owned subsidiary, Kilotrac Industries Sdn Bhd (Kilotrac).

Generally, retread tyres are popular amongst commercial and industrial vehicles as it is priced relatively cheaper than new tyres without compromising on quality and performance. As retread tyre demand in the domestic market is still fairly low, more than half of total retread tyre production in the country is exported overseas. The retread industry is expected to see better prospects following identified demand growth opportunities in both the domestic and overseas market.

Goodway’s manufacturing operations is located in Nilai, Seremban and is currently running on 64% average capacity utilization. The range of rubber compounds that are manufactured and distributed by the Group include Master Batch (M.B.), retread compounds, technical compounds, camelback, orbi tread, precured tread liners, cushion gums, sidewall veneers and gum chord.

Of late, Goodway has carved a niche for its rubber compound products by developing new processes and rubber compounds that are suited for heavy duty vehicles. This Off-the-Road (OTR) retreads are used for heavy duty vehicles such as tractors and earth works vehicles. The development of this new product formulation for OTR retreads is expected to drive sales growth going forward.

In terms of profitability, Goodway has recorded remarkable revenue growth of 21% on average since 2002 while operating margin has been averaging approximately 10% in the last three years. Commendable profitability performance over the years was a result of the Group’s continuous effort in expanding its presence overseas.

Meanwhile, Goodway’s debt leverage ratio has displayed gradual improvement since 2001. The Group’s gearing level in 2004 was 0.55x, while the projected pro-forma debt to equity position is 0.97x.

As at end-December 2004, Goodway has available cash and cash equivalents of RM6.35 million. Shareholder’s funds amount to RM59.9 million with share capital accounting for RM40.0 million, reserves and minority interest making up RM19.9 million. Goodway’s unutilized banking lines stood at RM14.3 million as at December 2004.