The Star reported that K SENG Seng Corporation Bhd, a supplier of secondary stainless steel products, will ride on its strength and 25 years of technical expertise to expand business locally and internationally.
Mr Koh Seng Kar CMD of K SENG Seng Corporation Bhd said that the expansion plans will get a boost from its listing on the main market of Bursa Malaysia scheduled this month. At the end of 2010, the company launched its initial public offering prospectus and has targeted January 19th 2011 for listing.
He added that "We have decided that now is the right time to list and expand our business and, at the same time, uplift the company's status."
Mr Koh also expects this listing exercise to provide the group access to the capital market to raise funds for future expansion and growth.
KSSC Group's main revenue stream comes from processing secondary stainless steel flat and long products, which involves incorporating slitting and shearing of steel sheets, as well as cutting of secondary stainless steel long products including round bars, flats and angles. The group has grown to become a one stop supply for secondary stainless steel products.
Mr Koh said that over the years, the group's capabilities have also extended to manufacturing of stainless steel tubes and pipes, stainless steel industrial fasteners, rigging accessories and components. For the financial year ended December 31st 2009, KSSC Group recorded a net profit of MYR 7.15 million on the back of MYR 80.08 million revenue.
He added that "After 25 years in the business, the group has grown to become a one stop supply centre for secondary stainless steel products with our manufacturing facilities in Balakong in Selangor. Hence, we are able to service a large customer base for various industries locally and overseas."
Based on the information in the company's IPO prospectus, the group's overseas market includes Indonesia, Singapore, Britain, Brunei and Papua New Guinea. Going forward, the group plans to expand its products, market and manufacturing facilities. These include a new range of stainless steel tubes and pipes under product expansion. For market expansion it is eyeing the Philippines, Thailand and Vietnam besides planning to purchase new machinery and equipment as part of expanding its manufacturing facilities.
Currently, Mr Koh said that the group's manufacturing and processing business is complemented by its trading operations which involve some 10,000 active stock keeping units of industrial products including marine hardware and consumables and other industrial hardware. He added that "The group is currently serving about 1,000 customers locally and internationally."
On competition, Mr Koh said that the impact of competition from new entrants is mitigated by entry barriers in the industry. He added that "The barriers of entry include the importance of having an established track record for manufacturing quality secondary stainless steel products, capital investment requirement and competent technical skills and knowledge to manufacture and process stainless steel products. Our competitive strengths include our long established track record, our extensive range of products, long standing and close business relationships with our major suppliers and major customers as well as our wide customer base."
The group has earmarked MYR 3.31 million of the proceeds to buy machinery for the development and production of a new range of secondary stainless steel products. It will utilize some MYR 6.26 million to fund working capital, while the remaining will be used to fund listing expenses estimated at MYR 1.9 million.
(Sourced from www.thestar.com.my)
