KUCHING: SIG Gases Bhd (SIG Gases), manufacturer, refiller and distributor of industrial gases in the country, seeks to expand its horizons into East Malaysia by setting up a production-cum-refilling plant in Sarawak.
IPO LAUCH: (From left) SIG Gases non-executive director Diong Tai Pew, non-independent non-executive director Datuk Syed Ahmad Alwee Asree, AmInvestment Bank Bhd managing director TC Kok, Peh and executive director Stanley Lau Cheng Ming.
SIG Gases executive chairman Peh Lam Hoh revealed this at the prospectus launch in conjunction with the group’s initial public offering (IPO) on the Main Market of Bursa Securities Malaysia Bhd yesterday.
“The new facility in Sarawak marks SIG Gases’s first venture into East Malaysia. We opine that the new plant would be aptly-positioned to cater to the anticipated growth in demand for industrial gases, propelled by the implementation of SCORE. Not only that, the new facility would also allow us to explore opportunities in neighbouring countries such as Brunei, Kalimantan and Indonesia,” he said in a statement
Peh further explained, “Our new production-cum-refilling plant will produce acetylene and carbon dioxide, as well as refill nitrogen and oxygen. The total capital expenditure for this new plant is approximately RM11 million, including the acquisition of land and construction of new facilities. Of this total capital expenditure, RM9.74 million will be funded by our IPO proceeds, and the balance from internally generated funds.”
The new Sarawak plant, planned for construction in 2011, would be SIG Gases’ third industrial gas production-cum-refilling plant, after its Senai (Johor) and Nilai (Negeri Sembilan) facilities. Apart from these, the group also has refilling branches located in Kuantan (Pahang), Puchong (Selangor), Krubong (Melaka) and Bukit Minyak (Penang).
“To date, SIG Gases had developed a customer base across various industries, including shipbuilding, metal fabrication, iron and steel, chemical, healthcare and other sectors,” he added.
According to the Independent Market Research, the sales value of the manufacturing of industrial gases in Malaysia, whether compressed, liquefied or in solid state, amounted to RM3.3 billion in 2009. The increased activity in the manufacturing sector in Malaysia on the back of economic recovery certainly boded well for the industrial gas sector.
Peh concluded, “With this positive outlook, we believe it is a good time to continue on our geographical expansion, and further chart our growth path into the future. We are optimistic that our upcoming IPO would serve to bring SIG Gases to greater heights.”
SIG Gases’s IPO comprised a public issue of 49.2 million new ordinary shares, and an offer-to-sale of three million shares at an issue/offer price of RM0.58 each. SIG Gases’s IPO will raised RM28.54 million in proceeds for the group.
Of the 49.2 million shares available, 7.5 million was offered to the Malaysian public, 17.7 million shares for private placement to selected investors, nine million shares for eligible directors, employees and business associates of the group, and 15 million shares for Bumiputera investors approved by the Ministry of International Trade and Industry.
Of the RM28.54 million in IPO proceeds, RM14.74 million would be allocated for purchase of land and building new facilities, RM6.4 million for purchase of plant, machinery and equipment, RM4.2 million for the repayment of term loan and the balance RM3.2 million to defray listing expenses.
The application period for SIG Gases’ IPO will close on July 29, 2010, 5pm. SIG Gases targets to list in August this year.