KUALA LUMPUR: Industrial gases manufacturer SIG Gases Bhd will invest RM11mil to set up a production-cum-refilling plant in Sarawak, said executive chairman Peh Lam Hoh said.
He said RM9.74mil would be via proceeds from its initial public offering (IPO) while the balance from internally-generated funds.
“Our new facility (in Sarawak) will produce acetylene and carbon dioxide as well as refill nitrogen and oxygen,” he said at the launch of SIG prospectus in conjunction with its listing on the main board of Bursa Malaysia yesterday.
SIG currently has one production-cum-refilling plants each in Senai, Johor, and Nilai, Negri Sembilan.
The new plant in Sarawak will be the group’s third plant and will also enable it to explore opportunities in Brunei and Kalimantan, Indonesia.
“We opine the new plant would be aptly-positioned to cater to the anticipated growth in demand for industrial gases, propelled by the implementation of the Sarawak Corridor of Renewable Energy,” Peh said.
To a question, executive director Stanley Lau said the construction was expected to begin in mid-2011 and would be built in the Similaju Industrial Park, some 60km from Bintulu, Sarawak.
Lau said SIG currently held a 27% market share of acetylene gas in Malaysia, 7% for oxygen and 2% for nitrogen.
On SIG’s IPO, 49.2 million and three million offer-for-sale shares of 50 sen each will be made available for subscription at an issue price of 58 sen.
SIG is expected to raise RM28.54mil from its IPO.
Lau said the group would utilise RM4.2mil from the proceeds to repay its term loan. As at April 30, SIG had total bank borrowings of about RM19.43mil.
For the financial year ended Dec 31, 2009 (FY09), SIG posted a net profit of RM7.1mil on revenue of RM54.6mil. Its net profit margin for FY09 fell slightly to 13.03% from 15.23% in FY08.
For the first four months to April 30, SIG achieved a net profit of RM1.33mil against RM1.35mil in the previous corresponding period. Revenue stood at RM18.6mil for the period.
Despite the relatively flat performance, Peh said the group was confident of maintaining its net profit margin going forward.
