Tuesday, April 13

GPP Resources debuts on Bursa Malaysia’s LEAP

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Tan (fifth left) alongside other directors from GPP Resources pose for a photo during GPP’s listing yesterday.

KUCHING: Green energy company GPP Resources Bhd, made its debut on Bursa Malaysia’s Leading Entrepreneur Accelerator Platform (LEAP) at 28.5 sen, a premium of half-a-sen from its reference price of 28 sen.

At the opening bell, the company saw 20,000 of the total 15.60 million new shares offered being transacted.

GPP aims to become a major manufacturer of wide range of oil palm trunk (OPT) products in Malaysia catering for domestic and overseas markets and to become a renewable energy power producer under the feed-in tariff (FiT) mechanism introduced by Sustainable Energy Development Authority (SEDA) Malaysia by 2021.

GPP and its subsidiaries are principally involved in businesses that are related to the use of biomass to produce renewable energy and OPT products.

Executive chairman Tan Tiam Aik said the group will continue to develop new OPT products to broaden its product portfolio to serve wider market and will venture into a build-operate-own model where it will operate and own biogas plants that the Group builds to generate electricity for the consumption of the palm oil mill and for sales to the National Grid.

“We intend to apply to become a renewable energy power producer under the FiT mechanism and seek joint-venture partners within 24 months upon our listing on the LEAP Market of Bursa Malaysia Securities Berhad (Bursa Securities).

“This will be beneficial to the future of our Group as we will be able to expand our revenue stream as well as generate recurring income for our Group,” he added in a statement.

According to the Independent Market Researcher Report, the continuous search for alternative raw materials for plywood has opened new opportunities for OPT to become an alternative raw material in the manufacture of plywood.

OPT is produced during the felling of oil palm trees at the end of their economic lifespan, which is approximately 25 to 30 years. Historically, the OPT has been left for natural decomposition after felling due to its high moisture content.

Instead of leaving OPT to decompose as waste, it can be processed and manufactured into plywood, medium density fibreboard, particle board and fibre-reinforced plastic composites.

Between 2015 and 2032, the estimated oil palm area that is expected to reach the end of their economic lifespan ranges from 63.00 thousand hectare to 235.00 thousand hectare per year, will result in a large supply of OPT.

The abundance of OPT supply ranging from 8.90 million units to 32.90 million units per year between 2015 and 2032 will be available from oil palm replanting areas.

Further, the introduction of the FiT mechanism by SEDA Malaysia has enabled producers of renewable energy with feed-in approval certificates to invest in renewable energy with an arrangement in place for the purchase of generated electricity by the National Grid at predetermined rates.

It is believed that this eases concerns that renewable energy power producers may have with regard to the viability of renewable energy in the longer term. The FiT mechanism presents renewable energy power producers with the option for the capture of biogas for power generation to generate revenue when sold to the National Grid.

Speaking to reporters at the Press Conference after GPP’s Listing Ceremony on the LEAP Market of Bursa, Tan said the Group will continue to leverage on the growth in the palm oil industry in Malaysia to grow its renewable energy and OPT products segments, which use organic wastes produced from the palm oil industry to serve as feedstock and raw materials for its businesses.

Under the listing exercise, GPP raised RM4.37 million from an excluded issuance of 15.60 million new shares in GPP to selected sophisticated investors at an issue price of RM0.28 per share.

GPP plans to utilise approximately RM1 million raised from the listing exercise as capital expenditure to purchase new machineries and equipment to cater for the Group’s current and future operations of OPT products business.

The Group will also utilise RM1.32 million from the proceeds as working capital for marketing and promotional activities as well as to finance the Group’s day-to-day operations; RM0.5 millionfor research and development, while the remaining RM1.55 million (35.49%) to be used to defray listing expenses.

TA Securities Holdings Berhad is the Approved Adviser, Continuing Adviser and Placement Agent for the LEAP Listing. Qwantum Capital Sdn Bhd (formerly known as Salihin Capital Sdn Bhd) is the Financial Adviser for the LEAP Listing.