KUALA LUMPUR (March 13): Specialty chemicals manufacturer SumiSaujana Group Bhd, which is set to list on Bursa Malaysia’s ACE Market in April, is looking to expand its presence in the Middle East and North America to capture new growth opportunities and mitigate high freight costs.
SumiSaujana may explore potential collaborations or partnerships to set up manufacturing facilities either in North America or the Middle East region as part of its expansion, according to its executive director and CEO Norazlam Norbi. However, discussions are still in the early stages and no final decision has been made yet.
"Given the significant increase in freight costs in recent years, we recognise the need to have manufacturing capabilities closer to our key markets. This will not only help us remain competitive but also improve our ability to serve clients more efficiently," Norazlam said at the group’s prospectus launch.
WATCH: SumiSaujana eyes global expansion
SumiSaujana derives over 70% of its revenue from international markets, including the Asia-Pacific, Middle East, Africa, Europe and the Americas. In Malaysia, its clientele includes state-owned energy giant Petroliam Nasional Bhd (Petronas) and various multinational corporations providing oil and gas (O&G) services.
Norazlam highlighted hte company’s strength, which lies in its expertise in the manufacturing of upstream and midstream specialty chemicals segments for the O&G sector. Approximately 90% of its manufacturing activities cater to these segments, which include drilling fluids, production chemicals and integrity chemicals such as corrosion inhibitors and demulsifiers.
"Our core business remains in O&G, but we are also diversifying into specialty industrial chemicals, including sustainable lubricants and oleochemicals. These areas present significant growth potential, especially in Malaysia, where the palm oil sector remains underutilised in high-end specialty chemical production," he added.
Unfazed by current market volatility, focus on long-term growth strategy
Norazlam acknowledged current uncertainties in the global equity market, but was optimistic about SumiSaujana’s listing prospects, citing the company’s strong growth trajectory and business fundamentals.
This amid several newly-listed companies’ lacklustre performance on their stock exchange debut, which saw some slumping below their IPO prices on their first day of trading.
"Market conditions are cyclical, and there is never a good time for listing or a bad time for listing. Our IPO is a strategic move to raise capital for expansion and to strengthen our financial position. We are committed to delivering shareholder value through long-term growth, rather than short-term stock price movements," he said.
SumiSaujana’s IPO will see the issuance of 310 million new shares and an offer-for-sale of up to 90 million existing shares, bringing the total stake on offer to investors to 27.71% of the company at an issue price of 24 sen per share.
The IPO application for SumiSaujana’s shares is open until March 25, with listing and quotation scheduled for April 9 on the ACE Market. RHB Investment Bank Bhd is the principal adviser, sponsor, sole underwriter and sole placement agent for the IPO.
Upon listing, SumiSaujana aims to further enhance its manufacturing capabilities, increase operational efficiency, and solidify its position as a regional and global player in the specialty chemicals sector.