(From left) M&A Securities corporate finance head Gary Ting, Zantat Holdings Bhd director Poo Lap Tuck, executive director Chan Jee Chet, co-founder and deputy chairman Chan Hup Ooi, managing director Ivan Chan, chairman Yap Yoon Kong, director Dr Gan Seng Kian, director Rima Ramona Muhammad Arif and M&A Equity Holdings Bhd managing director Datuk Bill Tan at the listing ceremony of Zantat Holdings Bhd on the ACE Market of Bursa Malaysia.
KUALA LUMPUR: Zantat Holdings Bhd made its debut on the ACE Market at 40 sen per share, a 60% premium over its initial public offering (IPO) price of 25 sen.
Managing director Ivan Chan Bin Iuan expressed optimism on the group’s future, as the bulk of the IPO proceeds of RM14mil will part-fund the group’s venture into the bioplastics value chain and expansion of its core business of calcium carbonate production.
He said the expansion plans will begin as early as next month and are scheduled to be completed by end-2025.
“Our expansion plan includes purchasing research and development (R&D) equipment, upgrading the infrastructure of its Calrock Perak plant and investing in high-efficiency components,” he added.
Calrock is one of the wholly-owned subsidiaries of Zantat.
Meanwhile, executive director Chan Jee Chet said the group’s expansion plan includes the installation of a new line in Calrock, which is expected to boost production capacity by 16,000 tonnes per year.
“With the expansion of our R&D centre, it will increase our revenue at the existing production capacity,” said Jee Chet.
Zantat also plans to invest RM1.4mil in high-efficiency machine components and facilitate industrial automation and another RM1mil to upgrade a major calcium carbonate production plant for its first time in 24 years.
A sum of RM3.4mil from the IPO proceeds will be used by Zantat to repay bank borrowings, followed by RM1.4mil for working capital and the remainder for estimated listing expenses.
On the group’s outlook, Ivan said the group anticipates to generate extra revenue and profit margins, in line with the recovery within the glove industry.
He expects the glove industry to recover after a sluggish spell last year, as some of Zantat’s products are used as fillers in the glove industry.
On its exports, the managing director expects revenue to grow from the Indian market, as the plastic industry there remains in growing demand.
He added that the Indian market accounts for 60% of Zantat’s total revenue, followed by Malaysia which makes up 30%.
According to Ivan, the Red Sea crisis has not impacted the group’s sales.
“We have been closely monitoring ocean shipping because we export a lot of our products to India,” he said.
The group’s decision to enter the Indian market was a decision made in 2012. Its Indian group of customers are mostly in the plastics industry.
“Prior to 2012, we had already known that the Indian market is a huge importer of calcium carbonate, as a few of our competitors have been exporting a huge amount to India since the early 2000s,” Ivan noted, adding that the group had two plants in total.
While Zantat’s Perak Plant 1 – which exports most of its products to India’s plastics industry – recorded an utilisation rate of 94%, Zantat Perak Plant 2, which produces a hybrid of calcium carbonate, is only 30% utilised.
Commenting on the relatively low utilisation, Jee Chet said: “This is why we are expanding the R&D facilities, to boost sales and the utilisation rate of Plant 2.”
He said Zantat also had plans to expand its footprint into South Korea, Australia, New Zealand and Europe within 2024 with its latest product, the bioplastic compounds.
Moreover, Ivan said the bioplastic compound by its newly established polymer arm, Zaneco Sdn Bhd, had gone commercial this quarter.
The bioplastic compound is designed to be both biodegradable and compostable, incorporating mineral fillers to enhance sustainability in single-use plastic bags and films.
Zantat initiated R&D of this segment in 2020, followed by product development in 2022. The product’s testing phase is until the first quarter of 2024.
“We are collaborating with a strategic partner to produce compostable garbage bags which will be exported to these countries,” Ivan said.
Additionally, Zantat plans to develop three new bioplastic compounds, namely, for stretch film, mulch film and marine-degradable film.
Ivan said several customers from Malaysia, India, Indonesia and Singapore had already been identified.
Zantat closed 12.5 sen up to 37.5 sen. It was the most active stock with 92.91 million shares traded.
