Actuarial, Risk & Analytics

Allgreentech seeks to limit these risks through, inter-alia, maintaining good business relationships with its customers and suppliers, providing better incentives and benefits to motivate and retain staff and tightening of credit control.

Political, Economic And Environmental Considerations

The group has clients in Malaysia and overseas such as Hong Kong, Australia, Canada and the Middle East. Any adverse developments in political, economic and regulatory conditions in Malaysia and the said countries where Allgreentech's subsidiaries markets its products, or sources its suppliers, could materially affect the financial and operational condition or the overall profitability of Allgreentech. Other political and economic uncertainties include the risk of war, expropriation, nationalisation, re-negotiation, or nullification of existing contracts, changes in rates of interest and methods of taxation, changes in import tariff policies and currency exchange controls.

Nonetheless, no assurance can be given that any change to these factors would not have any material adverse impact on Allgreentech.

Business And Operational Risks

Allgreentech and its subsidiaries are subject to certain risks inherent in its industry. These include, but are not limited to, shortage of labour, availability of raw materials, increases in the cost of labour, fluctuations in foreign exchange, irrecoverable of debts, business and collection risk.

Allgreentech seeks to limit these risks through, inter-alia, maintaining good business relationships with its customers and suppliers, providing better incentives and benefits to motivate and retain staff and tightening of credit control. Nonetheless, no assurance can be given that such measures will completely eliminate Allgreentech's business risks.

Supply And Prices Of Raw Materials

Allgreentech enjoys cordial relationships with its raw material suppliers and has over the years obtained good support from them. It is not dependent on any single supplier for sourcing its raw material, ensuring a constant supply of raw materials and minimal disruption in its operations. The prices of raw materials (eg. zinc) tend to fluctuate and can be volatile. Higher cost of materials will affect the profit margin of its subsidiary as the selling prices of the products could not be increased in tandem with the increase costs due to stiff competition coupled with inflated production and selling costs in the form of energies and logistics.

In view of the above, Allgreentech will endeavor to do its utmost to manage the volatile situation of the raw materials for the coming years. However, there can be no assurance that any change to the factors, such as shortage of raw materials, will not have any material adverse impact on the supply of raw materials to the group.

Competition

Allgreentech subsidiaries face relatively low competition from other companies in similar business activity. The high prices of raw materials resulted in many smaller firms going out of business and has also been a higher barrier to entry.  The employment of a more efficient method of production has resulted in a lower cost of production for its subsidiaries. Nevertheless, Allgreentech is constantly improving its operations to remain competitive.

Investment Risk

While Allgreentech will strive to maintain uniform standards of quality and service, controls, policies and procedures, the frequent fluctuations in the global marketplace does not provide any assurance that it will be able to generate sufficient revenues from its operations to offset costs.