MASTER Tec Group Bhd which is poised to list on the ACE Market of Bursa Malaysia on Jan 29 hopes to achieve its long sought-after objective since day one of its establishment – market visibility.
The group’s CEO Tee Kok Hwa expects the group’s status as a listed entity will enable it to secure bigger projects and generate a better corporate image aside from facilitating expansion while attracting highly skilled employees.
Headquartered in Melaka, Master Tec is primarily involved in the manufacturing and distribution of a wide range of low voltage (LV) power cables, control and instrumentation cables, and solar direct current (DC) power cables since 2009.
Additionally, the group is also involved in the trading and distribution of a range of medium voltage (MV) power cables and fibre optic cables to cater to various end-user markets.
Master Tec expects to raise RM61.66 mil from its initial public offering (IPO) exercise with plans to utilise approximately two-third of its IPO proceeds to construct two new manufacturing plants in Alor Gajah and to purchase new machineries and equipment to venture into the manufacturing of MV power cables.
“We aim to increase our annual production capacity to produce some 3,600 tonnes of MV power cables annually with production to commence by 4Q 2024,” envisages Tee.
Stiff competition
This expansion will enable Master Tec to market its new products to mostly capital-intensive manufacturing industries that demand higher voltage of electricity power transmission.
Among them are automotive plants, semiconductor fabrication plants, chemical plants, oil and gas (O&G) facilities, electrical vehicle charging station facilities and energy intensive datacentres, in addition to power utility companies such as Tenaga Nasional Bhd, Sarawak Energy Bhd and Sabah Electricity Sdn Bhd.
With regard to the industry, Tee said cable manufacturing is very much influenced by raw materials such as copper and aluminium.
“The price fluctuates every day and every hour due to the volatile foreign exchange (forex) between ringgit and the greenback. We need to have a good management system to manage the forex and metal price,” he explained.
Tee further highlighted that competition can be quite stiff in Malaysia with over 60 local cables manufacturing entities, not considering five operating in the same industrial area.
Last but not least, Tee stressed that cables being regulated products need to adhere to very stringent safety and quality requirements. “The opportunity is huge with the growth in data transmission and electrical construction in the country,” he added.
Currently, Master Tec has an accumulated production capacity to produce up to 9,500 tonnes of wires and cables annually, of which 4,000 tonnes are copper-cored wires and cables and up to 5,500 tonnes are made up of aluminium-cored wires and cables.
“Currently, Master Tec is one of the more aggressive wire and cable distributors in the region. We see that the market share will continue to grow in parallel with the profit itself,” projected Tee.
“Master Tec is also looking to expand overseas with a focus on neighbouring countries such as Singapore, Thailand and Brunei. Of course, we never forget about Myanmar and Cambodia. These countries also have potential but due to current conditions and political issues, we delay the exploration of these two countries.”
All in all, Master Tec Group’s IPO entails a public issue of 158.1 million new shares and an offer for sale of 127.5 million existing shares at an IPO price of 39 sen/share payable in full upon application. – Jan 15, 2024
