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SCMP Reporter

AFTER a year of painstaking reshuffling, Allied Industries International expects its new investment projects will give its shareholders a return this year.

   The industrial arm of the Allied Group, controlled by the family of Malaysian businessman Lee Ming Tee, is now centred on five basic industries in China.

   They were described by chairman and chief executive Chung Tze Hien as sectors ''offering the most potential to grow''.

  Mr Chung would not say how much Allied Industries had already pumped into the new projects.

   But it has been estimated the company has spent about $500 million so far, following a change in strategy last year which involved disposing of non-core operations and focusing on the booming mainland.

  It was reckoned Allied Industries realised about $800 million from the sale of stakes in Paramount Printing Group, Tung Wing Steel Holdings, Guardforce and Santai Manufacturing.

  Mr Chung said Allied Industries recognised ''a need of demand for profit'' and the company had ''attempted to fill the gap of income during the sale of the subsidiaries.''    The company had focused on buying into concerns efficient with new technology for quicker returns, he said.

  ''We get in at the latter stage of the plant so as to cut short the time in building it,'' he said.

  Allied Industries plunged into red for the first six months of last year, but reported a substantial amount of extraordinary gains from the disposals.

   The full-year figure has yet to be announced.

  The company now embraces five major businesses - chemical, building materials, transport, consumer products distribution and environmental protection.

   It also owns 60 per cent of Shangdong International Economic Development Corp, which serves as a mainland investment vehicle in shareholding companies.

  Mr Chung expected profit from the divisions this year, although it would not be ''dramatic''.

  He pointed to the transport and distribution divisions as companies with a track record.

   Allied Industries has a 60 per cent stake in a joint venture with the Shanxi Yan Bei No 2 Trucking Co in Datong. It began operations in March last year.

   The company also holds interests in two food distribution companies which were bought in early February.

  Mr Chung said Allied Industries' newly formed joint ventures in manufacturing chemicals and building materials would be in production this year.

  It owns a 35 per cent stake in three joint ventures with Jilin Chemical Industrial Corp and has a 60 per cent share of a Shanghai cement factory.

  In the environmental protection sector, the company owns a seven per cent stake in Omnicorp of the US as a strategic investment.

  Allied Industries has also taken a 20 per cent interest in a consortium led by Shenzhen Building Materials Industrial Group, acquiring a controlling interest in the listed Innovisions Holdings.

  Mr Chung said the strategic alliance would be beneficial to the development of its building materials business in Zhujiang where the Shenzhen partner has a strong network.

  Allied Industries, along with Allied Group companies, was a subject of a massive police raid in September last year in relation to a year-long government investigation.

   Mr Lee resigned as chairman of the companies.

  Mr Chung said while Mr Lee had relinquished his operational role, he still acted as a consultant. ''We should not discount the connections he has in China.'' 



Allied Industries pins hopes on new projects