KUALA LUMPUR: WTEC Group Bhd, a manufacturer and trader of foam and non-foam products, is accelerating its growth trajectory with the purchase and renovation of a new manufacturing facility.
The expansion forms a core part of the company’s strategy to enhance its operational capacity and efficiency, backed by funds to be raised from its initial public offering (IPO) on the ACE Market of Bursa Malaysia.
WTEC Group’s IPO comprises a public issuance of 90.2 million new ordinary shares, representing 18.8% of its enlarged share capital, alongside an offer for sale of 43.2 million existing shares or 9%. At the IPO price of 25 sen per share, the company is expected to have a market capitalisation of RM120 million upon listing. WTEC Group is scheduled to debut on the ACE Market on April 29.
WTEC Group aims to raise RM22.5 million from the IPO, of which RM9.425 million (41.8% of total proceeds) has been earmarked for the acquisition and renovation of a ready-built factory.
Group managing director Tan Kok Kheng said the facility, to be acquired in Kajang or Semenyih, will allow the company to consolidate multiple operations under one roof, streamline production workflows and house advanced machinery.
“The new facility is a strategic move that will enable us to scale up our production capabilities, optimise operational efficiency, and cater to the growing demand from both local and international clients. We plan to commence operations at the new factory by the second quarter of 2026. This expansion is a testament to our commitment to long-term growth and competitiveness,” he said at the company’s IPO prospectus launch today.
Tan said WTEC operates from three rented factories currently. The consolidation into a single manufacturing hub is expected to significantly improve management control, quality oversight and material handling. “At present, our bulky materials have to be transported between different sites, which is time-consuming and inefficient. With this new factory, we aim to centralise operations and improve overall productivity.”
Apart from the factory investment, WTEC Group will channel RM3 million (13.3%) of the IPO proceeds towards the purchase of new machinery and equipment to bolster its automation capabilities, reduce reliance on manual labour and enhance product quality.
Other allocations include RM1 million for sales and marketing expenses (4.4%), RM5.1 million for working capital (22.7%), and RM4 million to cover listing-related expenses (17.7%).
Established over two decades ago, WTEC Group has built a solid reputation across multiple industries, including automotive, electrical and electronics (E&E), construction, medical and personal protective equipment. The group serves clients in Malaysia and exports to markets such as Vietnam, Australia and Thailand.
WTEC’s financial performance reflects its resilience and growth momentum. Revenue climbed from RM43.1 million in the financial year ended Dec 31, 2021 (FY21) to RM52 million in FY24, translating into a compound annual growth rate of over 6.5%.
Meanwhile, profit after tax more than doubled over the same period, rising from RM3.5 million to RM8.2 million.
In FY24, the manufacturing of foam products contributed 65.7% of total revenue, followed by 15.9% from non-foam products, while trading of polyurethane foam and other related materials made up the remaining 18.4%.
Tan said, “With strong foundations and extensive industry experience, we are confident in our ability to capitalise on the opportunities ahead, particularly in the automotive and E&E sectors, where demand for high-performance materials continues to grow.”
