Business

Saturday October 31, 2009

Kelington to expand gas, chemical delivery in China and Taiwan


KUALA LUMPUR: Kelington Group Bhd, which will be listed on the ACE Market next month, aims to aggressively expand its ultra-high purity (UHP) gas and chemical delivery systems business in China and Taiwan.

Kelington has about 18% market share of the business in Malaysia and less than 2% collectively in China and Taiwan.

However, its China and Taiwan business contributed about 60%, or RM38mil, of Kelington’s revenue in 2008.

Chairman and chief executive officer Raymond Gan said going by the company’s earnings derived from the two countries, it was clear the two markets represented tremendous opportunity for growth, especially in market share.

To grow market share in Taiwan and China, he said Kelington needed to secure bigger contracts and be seen as a serious player in the niche industry.

“The company’s impressive overseas revenue growth over the years was due to our active participation in implementing solutions in many high-technology facilities in these countries,” he said.

Gan said Kelington’s listing slated for Nov 25 would help provide stronger brand recognition of the company at the international arena and adequate capital to bid for bigger projects in China and Taiwan.

“The listing will place us in a more favourable position to compete with the established players in the two markets,” he told reporters after the launch of the company’s initial public offering (IPO) prospectus yesterday.

He added that the UHP industry was expected to be driven by rapid changes in manufacturing processes and technology, particularly in the area of green technology.

Rising demand for innovative and function-packed electronics such as wireless and portable communication devices would fuel higher demand for advanced UHP delivery systems, Gan said.

Kelington’s IPO comprises an offer for sale of 9 million shares and public issue of 9.71 million new 10 sen shares at an issue price of 53 sen each.

Of the public issue shares, 2.809 million shares are allocated for employees, business associates and subsidiary companies, 5.941 million shares for private placement and 960,000 shares for the Malaysian public.

Chief operating officer Steven Ong said the listing exercise was expected to raise about RM5.15mil, of which RM2.64mil would be used for working capital, RM1.76mil for the listing exercise, RM500,000 for capital expenditure and RM250,000 for research and development.

Kelington, established in 2000, currently has a cash pile of RM20mil.

“This listing exercise is not about raising funds for expansion but rather raising the corporate profile of our company,” Ong said.

  • E-mail this story
  • Print this story