KUALA LUMPUR: BWYS Group Bhd expects the positive outlook of the construction sector to continue driving its growth prospects.
Group chief operations officer Ken Lau Ken Wah said this is underpinned by significant infrastructure expansion in the country. “There are also new data centre investments coming in, so the opportunities are there. Hence, we are very positive in terms of growth,” he said after the company’s listing yesterday.
Serving two main industries – building construction and warehousing and storage industries – the sheet metal product manufacturer and scaffolding supplier’s principal products are roofing sheets and trusses, industrial racking systems and welded pipes. The group is also engaged in the trading of steel materials and steel-related products.
In the financial year ended Dec 31, 2023 (FY23), 95.6% of BWYS’ revenue was generated locally with the rest coming from export markets like the United States, Singapore, Indonesia, Australia, Bangladesh, the Philippines, the United Arab Emirates, Brunei and Kuwait.
Currently, the United States is the group’s largest export market. It is also a part of BWYS’ business strategies to expand and grow its business in various regions including South-East Asia, the Middle East and South America.
“For our export markets, we are focused on industrial racking systems that already complies with the European standard. The majority of the export countries mentioned are using that standard, so we are looking at the opportunities there.
“Our strategy is to sell our products to resellers to utilise their networks to gain access without needing to invest in resources and facilities in foreign markets,” Lau said.
He added the group benefits from US tariffs and restrictions, which gives it a competitive advantage in the market.
“When we sell to the United States, we act as an original equipment manufacturer for our US partners. They provide us with their patented designs, given that they have their own standards there and we will manufacture for them,” he said.
BWYS raised RM56.4mil from the public issue of 256.30 million new shares. The company made its debut on the ACE Market of Bursa Malaysia yesterday, opening at 32 sen per share or 10 sen higher than its initial public offering (IPO) price of 22 sen per share.
The opening volume was 33.9 million shares. The stock ended its maiden trading day at 35 sen, a premium of 13 sen or 59% over its IPO price of 22 sen. The share price hit a high of 36.5 sen and a low of 32 sen in intraday trade.
The bulk of the proceeds raised or RM41.4mil is earmarked for capital expenditure. From this sum, RM22.8mil will be used for the construction of a new factory in Penang, another RM7.7mil will go towards the purchase of new machinery and equipment and RM10.8mil is for the implementation of a new enterprise resource planning system, production and inventory management systems.
Apart from new production lines, the new factory will also house existing machinery and equipment for the industrial racking systems and roofing sheets and truss manufacturing operations.
“The new factory serves two main functions. Firstly is the expansion of our production line for the polyurethane foam sandwich panel, and secondly is the new automated powder coating line for our industrial racking systems.
“We have very limited warehouse space in our current facilities. The new site will increase our warehouse capacity by over 11 times, allowing us to have better inventory management,” Lau said.
BWYS’ main input materials are steel-based materials including hot rolled steel coils and coated cold-rolled steel coils.
In general, other than passing on the costs to consumers, Lau said the group mitigates costs by buying raw materials in a consistent manner.
“We purchase our raw materials consistently, on a monthly basis. If we anticipate that prices are going to go up, we will buy more. If prices are expected to fall, then we will buy less. Hence, if you were to average it out, even if there is a spike, more or less, we are able to cover for it,” he said.
