KUALA LUMPUR: OB Holdings Bhd has plans to expand into Jakarta, Indonesia, particularly for its fortified food and beverage (F&B) and dietary supplements segment in the second half of next year, says executive director Boey Lee Bao Yu.
“The market size of Indonesia is bigger than Malaysia as it has a huge population. We will be setting up an office in Indonesia. In fact, a lot of our products are already indirectly exported to Indonesia, through our third-party brand customers,” she said after the company’s listing ceremony here yesterday.
The fortified food and supplement maker derived more than 90% of its revenue from the domestic market for the financial year ended May 31, 2024 (FY24).
OB Holdings also exports to Thailand, Hong Kong, Singapore, China, Taiwan, Australia, and the United States.
In terms of segment, OB Holdings’ manufacturing services of fortified F&B and dietary supplements to third-party brand owners remained its biggest revenue contributor at 62.3% in FY24, followed by sales of its house brands products (24%) and trading of milk powder and other activities (14%). OB Holdings financial controller Faun Chee Yarn said the group’s expansion is two-pronged, with one being the manufacturing aspect and the other, its house brands.
“On our house brands, the company needs to have market penetration which will incur a lot of advertising and promotion costs. Hence, manufacturing and house brands will grow concurrently.
“For the time being, core revenue contribution will still be from manufacturing services and not expected to be overtaken by the sales of house brands products. In time to come, these two segments will grow together,” he said.
OB Holdings raised RM28.8mil from the public issue of 120 million new shares.
The company made its debut on the ACE Market of Bursa Malaysia, opening at 25 sen per share or one sen higher than its initial public offering (IPO) price of 24 sen per share.
The opening volume was 6.4 million shares.
The stock closed its maiden trading day unchanged at 25 sen. The share price hit a high of 26 sen and low of 24 sen during intraday trade.
The bulk of the proceeds raised or RM14.9mil is earmarked for the repayment of bank borrowings for the construction of its new factory in Serendah, Selangor.
A total of RM5mil will be used for the purchase of new machines, and RM0.9mil will go towards product development expenditure.
Meanwhile, RM1mil is allocated for marketing and advertisement.
A further RM3mil is set aside for working capital and the remainder RM4mil will be used to defray estimated listing expenses.
OB Holdings aimed to double its production capacity by 2026 with the completion of its new factory in Serendah.
The new facility is expected to be completed by the first half of 2025 (1H25) and commercial production to begin in 1H26.
“The production capacity of the new factory is expected to be 2.5 times of our current manufacturing capacity.
“We plan to purchase new machinery to support our capacity expansion and set up a new lab to enhance the company’s product development activities and support in-house culturing of probiotics strains,” she said. Alliance Islamic Bank Bhd is the principal adviser, sponsor, sole underwriter and placement agent for the listing exercise.
