Future Plans and Strategies

Our future plans are focused in two (2) key areas as depicted in the graph below:

Future Plans and Strategies

(a) Construction of a New Processing Plant with Warehousing Facilities

Part of our future plans is to build a new processing plant together with warehousing facilities to cater for new processing services. We intend to set-up the new processing plant in Kawasan Perindustrian Bukit Raja Selatan.

In July 2012, Our Group had purchased a piece of freehold industrial land with an existing detached building with annexed office building to house a new processing plant with warehousing facilities. The said land is located directly opposite our head office at Wisma Leon Fuat and has a land area of approximately 130,680 sq. ft. The cost of the acquisition of the land with building and related incidental cost is RM19.00 million and RM0.64 million respectively of which RM2.56 million was funded through internally generated funds whilst the remaining purchase consideration of RM17.08 million was funded through bank borrowings. Upon completion of the Listing, we plan to utilise RM13.00 million of our Public Issue proceeds to partly repay these bank borrowings.

The new processing plant will be equipped with two (2) new slitting machines which would take up approximately 10,000 sq. ft. of floor space for the processing of steel products. In addition, the remaining floor space would be utilised to stock our steel materials for trading and processing purposes.

We intend to commence the construction of the new processing plant with warehousing facilities by 2015. The construction is estimated to be completed by 2016 and we intend to commence operations in the new plant by 2016. The cost of the construction of new processing plant with warehousing facilities is estimated to be RM6.00 million. We plan to utilise RM6.00 million of our Public Issue proceeds for the construction of this new processing plant with warehousing facilities. In the event that the construction cost exceeds RM6.00 million, the additional cost will be funded through internally generated funds and/or bank borrowings.

The construction of the new processing plant with warehousing facilities includes the strengthening of the foundation of the ground to house the new machinery as well as renovation and refurbishment of the existing office building.



(b) Purchase of New Machinery for Slitting Process

Our Group’s current processing operations include cutting, levelling, shearing, profiling, bending and finishing of products as well as production of expanded metal. Part of our future plans is to expand our facilities to incorporate slitting of steel products as part of our processing operations.

Slitting, which is the process of cutting coils into various widths, will complement our existing range of value added services in our processing operations.

As part of our plans to undertake slitting activities, our Group intends to utilise RM6.00 million of our Public Issue proceeds to purchase two (2) new slitting machines by 2016. The cost of the slitting machines is estimated at RM3.00 million per unit.