How will Kanger mitigate supply shortages and price hikes in raw material?

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Kanger to Secure Stable Raw Material Supply Through Plantation Concession

Kanger International Berhad aims to mitigate potential supply shortages and price hikes of raw bamboo by securing a substantial plantation concession in Jingzhou, China. This strategic move will provide a direct and steady source of ready-to-harvest bamboo, reducing reliance on external suppliers and safeguarding production costs and profitability. The company is partnering with the Jingzhou government to develop an estimated 20,833 acres of bamboo plantation across three phases.
Secured Plantation Concession

Through a partnership with the Jingzhou government, Kanger International Berhad will gain access to a significant bamboo plantation concession. This concession is projected to cover an estimated 20,833 acres, to be developed in three distinct phases. The direct control over this extensive land area ensures a consistent and readily available supply of raw bamboo for the company's processing operations.
Reduced Dependence on External Sources

The newly secured bamboo plantation will serve as a primary source for the raw materials needed in the production of Kanger's bamboo products. By having a steady supply of ready-to-harvest bamboo surrounding its new plant in Jingzhou, the company will become less dependent on external suppliers. This strategic shift is designed to prevent disruptions caused by supply shortages and unexpected increases in raw material prices.
Impact on Profitability and Costs

Minimising reliance on external raw material sourcing is a key strategy for Kanger to maintain stable production costs and protect its profit margins. Supply shortages and sudden price hikes from external vendors can have a material impact on the overall cost of raw materials, directly affecting the company's profitability. The plantation concession provides a buffer against these market volatilities.

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How will Kanger mitigate supply shortages and price hikes in raw material?

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