KUALA LUMPUR: Sik Cheong Bhd, which made its debut on Bursa Malaysia’s ACE Market today, plans to capitalise on the growth potential of Malaysia’s refined, bleached, and deodorised (RBD) palm olein repackaging sector.
Managing director Wong Hing Ngiap said the sector is expected to experience significant expansion, with a robust projected compound annual growth rate of 20.9%, potentially reaching RM12.8 billion by 2026.
He said the anticipated growth is driven by sustained consumer demand and increased demand that is coming from hotels, restaurants and catering operators.
“While palm olein oil is the most produced vegetable oil in the country, soybean oil holds the third position, indicating substantial market potential. Recognising this, Sik Cheong will expand the product range to include high oleic soybean oil, offering a cost-effective option suitable for most types of cooking methods,” he said at the listing event.
Wong said that from its early days, the company has grown steadily and built a strong foothold in the palm olein oil repackaging market. “Today, we have earned the trust of over 500 customers who rely on us for their palm olein oil needs every day. This reflects our commitment to providing reliable and prompt deliveries and quality palm olein oil products.”
The company looks forward to a bright future that has a great potential for growth, Wong said.
“We are a sustainable business, with palm olein oil being widely used and having a large market potential. With the funds raised, we will expand our product range with high oleic soybean oil. And we will extend our market reach to Perak, Negeri Sembilan, Malacca and Pahang, allowing us to serve a wider customer base.”
Sik Cheong made an impressive debut on the ACE Market. Its share price opened at 50 sen, representing a premium of 23 sen or 85.2% over the issue price of 27 sen. It closed at 36 sen, 9 sen or 33.3% higher than the IPO price, on volume of 128.52 million shares.
Sik Cheong raised a total of RM17.8 million from the IPO. Of this amount, RM7.2 million (40.3%) is earmarked for expansion of the packaging facility, including rebuilding a factory and purchasing machinery and equipment. Additionally, RM900,000 (5%) is for the purchase of delivery trucks.
The company has also allocated RM6 million (33.4%) for working capital, with the remaining RM3.8 million (21.3%) to cover listing expenses.
Elaborating, Wong said Sik Cheong will set up a new packaging facility and rebuild a factory (Factory No. 9) situated next to its existing facility (Factory No. 11).
The rebuilding of Factory No. 9 will increase Sik Cheong’s total operational space by 88%, effectively addressing Factory No. 11’s space limitations for repackaging and storing RBD palm olein oil products.
Additionally, the company intends to purchase new machinery and equipment for repackaging high-oleic soybean oil and RBD palm olein oil products.
With Perak, Negeri Sembilan, Malacca and Pahang’s proximity to Kuala Lumpur and Selangor, where Factory No. 11 is located, Sik Cheong can extend its sales and distribution capabilities efficiently.
The company will also increase its fleet of delivery trucks to ensure timely and reliable deliveries, which is critical for maintaining customer confidence as edible oil is an essential ingredient for food preparation.
