by ANIS HAZIM / Pic by TMR
INTEGRATED palm oil milling services provider Ecoscience International Bhd is tapping into the Indonesian market for its next phase of global expansion following its listing on the ACE Market of Bursa Malaysia.
MD Wong Choi Ong said the group aims to continually upgrade its business in the global arena, starting with the establishment of an office and fabrication facility in Indonesia.
“We believe our neighbouring country’s standing as the world’s largest producer of palm oil will provide us with an excellent platform to bring Ecoscience International to greater heights,” Wong said in a statement accompanying the firm’s listing today.
In a virtual press conference, ED Pan Kum Wan said the group sees potential in Indonesia’s market which aligns with the group’s expansion plan.
“Indonesia is very fast, especially for biodiesel, where they are moving to B40 while Malaysia is still moving to B20.
“We would like to set up there (Indonesia) to be nearer to the market, and also the shipment costs and everything is an advantage for us,” Pan said.
While Malaysia is facing labour shortages, he sees the advantage in Indonesia in terms of its labour.
“We have experience with Indonesian workers who are very good and skilful,” he noted.
Ecoscience International made its debut on the ACE Market at 29 sen, which is one sen lower than its IPO price of 30 sen, with an opening volume of 1.38 million.
The group has allocated RM5 million or 20.3% of the total IPO proceeds of RM24.7 million for its business expansion in Indonesia.
Another RM7.9 million or 31.8% have been earmarked for working capital, RM7 million or 28.4% for repayment of bank borrowings and RM1 million or 4.1% for expanding its environmental and energy efficiency business.
The balance of RM3.8 million or 15.4% is for defraying the group’s listing expenses.
Commenting on the group’s lower opening share price, Pan said the fluctuation in the share price is beyond their control, however, the group remains focused on expanding its business which will value its investors in the long run.
“Unfortunately, macroeconomic uncertainties and headwinds affect investor confidence in the short term for now.
“We are here for long-term work, and we will work hard to deliver the growth prospects that we have communicated in our prospectus,” he added.
Meanwhile, Ecoscience International business development director Thing Jin Suan foresees a positive outlook for the group as it is not directly affected by the palm oil market price.
“For example, during the Covid-19 period, when the palm oil price was below RM4,000 or RM3,000, our business was still going on, and we were not directly affected by the palm oil price,” Thing said.
Ecoscience International has a dividend policy where the board of directors intends to recommend and distribute a dividend of at least 20% of its annual audited consolidated profit after tax attributable to its shareholders.
Hong Leong Investment Bhd is the principal advisor, sponsor, underwriter and placement agent for the IPO exercise.