This article first appeared in The Edge Malaysia Weekly on September 2, 2024 - September 8, 2024

Thanks to a slew of activities across its business segments, Unique Fire Holdings Bhd (KL:UNIQUE) is on track with its growth plans to strengthen its fire protection systems and equipment business in Malaysia while gearing up to expand a key offering into international markets via a joint venture.

The group is in a good place since its listing on the ACE Market of Bursa Malaysia in August 2022. So far, it has used RM15.7 million, or 72%, of the total initial public offering proceeds of RM21.78 million for its expansion plans and working capital. Part of the proceeds were used to acquire a light industrial factory in Penang for RM1.78 million, which is slated to commence operations by the first quarter of 2025.

Unique Fire has three business segments: assembly, which accounted for nearly half of its revenue for the first quarter ended June 30, 2024 (1QFY2025); manufacturing; and distribution.

“We foresee the bulk of our growth coming from our manufacturing division, where regulations require that portable fire extinguishers be scrapped 10 years after the manufacturing date. This facilitates growth in demand,” executive director Datuk Marcus Liew Kang Leong, 45, tells The Edge in an interview at its headquarters in Selangor. Marcus is the eldest of four brothers who are in the family business with their father, Liew Sen Hoi, 70, founder and group managing director of Unique Fire.

“With the directive from the Fire and Rescue Department of Malaysia (Bomba) mandating these renewals for residential and commercial buildings for more states across Malaysia, that’s easily 15% to 20% towards annual revenue growth in our distribution division.”

Unique Fire carries several thousand products, including fire suppression systems such as sprinkler systems, wet and dry riser systems and hydrants, and wet chemical fire suppression systems as well as fire protection accessories such as fire detection and alarm devices, batteries, cabinets, fire hoses and fire blankets.

Marcus says the gas suppression business, which contributes 10% to the group’s assembly division, stands to grow by about 5% in FY2026 as the group strives to clinch more jobs to supply fire protection equipment to data centre players. The assembly division produces about 25,000 dry-powder fire extinguishers a month.

“We have also started a distribution centre in Johor Bahru and we have distributors throughout Malaysia, including Sabah and Sarawak. With the new distribution centres, the group can expedite deliveries to clients within the [state or region] and, in fact, enable clients to receive their orders by the very next day,” says Marcus.

Unique Fire also distributes electric vehicle (EV) fire blankets, a heavy-duty, non-combustible material, for dousing lithium battery fires. The potential for this income stream looks to be realised over the longer term.

“Putrajaya has given its directive to have 10,000 charging stations for EVs by 2025, and each station must have an EV blanket. There are about 2,000 charging stations now. We have authorised distributorship of Bridgehill’s fire blanket, a premium product from Norway retailing for RM16,000 apiece, as well as cheaper options from other countries selling for a fraction of that,” says Marcus, adding that the group has been reaching out to providers of EV charging stations.

He concedes that given the group’s dependence on the construction and property sectors, a lull in these industries could limit demand for the company’s products, while any increase in steel prices may escalate the cost of its products and affect margins.

For now, Unique Fire derives the bulk of its business from the domestic market.

“We have exported products to Cambodia, Hong Kong and Bangadesh in the past, but competition from China has been strong. We have some exposure to Vietnam and Brunei now, but it is small. Our focus will still be [on] the Malaysian market,” Marcus says, noting that it has been difficult to rival the lower prices of products from China.

The dilemma is not unique to the group. As such, the group’s joint venture with Shanghai Mosafe Equipment Co Ltd’s wholly-owned unit Mosafe Protection Pte Ltd to manufacture and distribute fire sprinklers locally and regionally appears to be a viable means of dealing with competition from the mainland while tapping the international markets.

“It is a 60:40 deal between Unique Fire and Mosafe, in which we will manufacture Mosafe’s sprinklers here in our factory, and both companies will leverage each other’s databases to distribute the products. This deal gives us access to Mosafe’s regional database. We have known this company for at least 15 years and have done some work together in the past. So, there’s some mileage in this relationship,” explains Marcus.

“The process to get the company registered and the product certified and tested will take nine months to a year. We can start producing after that and the new business will start to be reflected in our books around the third quarter of 2025. Mosafe will cover the Middle Eastern, the US and European markets while Unique Fire will cover Southeast Asia.”

Currently, Unique Fire distributes 800,000 to one million made-in-Taiwan sprinkler heads annually under its trading segment.

For 1QFY2025, Unique Fire’s net profit grew to RM2.1 million, up 75% year on year from RM1.2 million, on an 18% increase in revenue to RM26 million. The company attributed the growth in revenue to an increase in demand from the construction and property development sectors amid a resumption of projects and commencement of new jobs. The group also said the improved net profit was due to better cost management, particularly in the procurement of materials and trading goods.

Unique Fire is a beneficiary of the strengthening of the ringgit against the US dollar, as the company sources raw materials from overseas markets in US dollars for its assembly division.

While the firm has no dividend policy, it paid out dividends of 0.5 sen a share in FY2023 and 0.6 sen in FY2024, and has announced a single-tier interim dividend of 0.8 sen a share in FY2025.

Given its prospects in Malaysia — and regionally, via its collaboration with Mosafe — Marcus says the group’s growth targets of 5% to 8% for FY2025, and 8% to 10% a year thereafter, are fair.

Sen Hoi began his career in 1971 as a supervisor and installer of firefighting equipment at LKT Engineering. He left the company in 1975 to start his own business as co-owner of Brilliant Fire Engineering Sdn Bhd, which managed contractors for fire protection safety equipment and system installations for a decade. He served as a director of UBE Engineering Sdn Bhd in the 1990s before buying into it in April 1997 and renaming it Unique Fire Industry Sdn Bhd.

According to Unique Fire’s 2024 annual report, Sen Hoi controls the company with a 68.55% shareholding — 4.55% directly and 63% via his family vehicle Unique Go Sdn Bhd.

“Many of the major establishments today, including airports, renowned corporate buildings and factories in Kelana Jaya [in Selangor], were my father’s clients in the early days. In 1997, he ventured into the distribution business, as numerous international [firefighting and protection systems] brands, [particularly] from the US, entered our shores, and he was experienced enough to know which brands were best suited for local projects.

Among industry peers, we carry the widest range of fire protection brands today because we got in early as a distributor,” says Marcus, adding that the group ventured into manufacturing in 2008.

Asked who its competitors are, Marcus alludes to three major players — Steel Recon Industries Sdn Bhd (SRI), Fitters Diversified Bhd (KL:FITTERS) and Fire Fighter Group — as industry peers, among the 235 industry operators registered with the Malaysian Fire Protection Association.

He says: “SRI is somewhat similar to us because of its manufacturing, distributing and assembling activities, but it also has a contracting arm [undertaking installations]. Since we do not undertake contracting jobs, that puts us out of direct competition with the players in this space.” 

Shares in Unique Fire have risen 61% year to date to close at 35.5 sen on Aug 30, giving the group a market capitalisation of RM140 million. 

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