Expansion there can cater to the vast operations of MNCs as Thailand is a manufacturing hub for South-East Asia
By SHAHEERA AZNAM SHAH / Source: Volcano.co.th
VOLCANO Bhd, a global nameplates and plastic injection moulded parts manufacturer, has set aside RM5 million for capital expenditure (capex) for financial year 2021 (FY21).
Its ED and CFO Khoo Boo Wui said a portion of the capex will be utilised to expand its footprints in Thailand, catering to vast operations of multinational companies
(MNCs) in that country. “Thailand is a manufacturing hub for South-East Asia with many MNCs choosing to set up their extended operations in the country. We see a big opportunity in terms of securing MNC customers.
“The capex will be utilised for equipment procurement such as additional laser-cutting machines and plastic injection moulding machines.
“We will expand our factory size in Thailand to accommodate the pieces of the new equipment, and use the space at the optimal level,” he said during the virtual press conference after its listing yesterday.
Volcano’s prominent markets are Thailand and Singapore with its foreign customers accounting for more than 95% of its overall revenue, according to its FY20 report.
Volcano’s operation involves manufacturing parts and components based on materials, sizes, designs and specifications requested by customers, primarily in the electrical and electronics, and automotive industries.
Among its customer portfolios are Hewlett-Packard Co, Fisher & Paykel Appliances (Thailand) Co Ltd, Donaldson (Thailand) Co Ltd, Sharp Indonesia and Panasonic Thailand.
Volcano raised RM8.75 million from the IPO exercise and plans to utilise about 63% of the proceeds for machinery and equipment purchase.
The remaining RM3.2 million will be the listing expenses.
The 8.25 million new shares offered to the public were 176.6 times oversubscribed, while another 43.5 million shares were offered via private placement.
Khoo said Volcano has established a 30% dividend policy of its net profit, depending on the group’s performance and recommendation from its board members.
Volcano made a strong debut on the Bursa Malaysia’s ACE Market at 70 sen, a premium of 100% from the issue price of 35 sen.
The stock closed its maiden trading day at 48.5 sen.