KUALA LUMPUR: Engineering services provider West River Bhd has unveiled plans to construct a new manufacturing facility in Klang Valley and extend its market presence into Johor and Penang.
Managing director Lim Yong Lai said the group aims to channel RM10 million (35.84%) of its initial public offering (IPO) proceeds into land acquisition and the development of a new manufacturing facility to increase its production capacity.
“Our initial plan is to buy land, get the necessary approvals, and build the plant ourselves, a process we estimate will take around three years. However, we are also exploring the option of acquiring ready-built buildings which could shorten the timeline depending on market availability,” he said in a press conference following West River’s listing on Bursa Malaysia’s ACE Market today.
Lim said the proposed facility is expected to have around 35,000 sq ft of built-up area, significantly larger than its current site in Kajang. “It will accommodate expanded production lines for the manufacturing of electrical panels and distribution boards, along with warehousing space.”
Apart from physical expansion, West River also plans to diversify geographically.
Currently, about 80% of the company’s revenue comes from Klang Valley, but it is now eyeing project opportunities in Johor and Penang, especially within sectors such as hospitality and data centres.
“We have two projects pending on the northern side, one in Langkawi and another in the hotel sector. Meanwhile, we are also tendering for data centre projects in Johor, which is a hot sector right now. About 13% of our RM1 billion tender book consists of data centre projects,” Lim disclosed.
On financing strategy, he said West River is utilising RM5.6 million (20%) from the IPO to repay borrowings, aiming to reduce its gearing ratio from around 0.3 to between 0.1 and 0.2. “This will provide more flexibility for future fundraising if needed.”
Commenting on Malacca Securities’ projection of a 9.7% compound annual growth rate (CAGR) in core revenue over the next three years, Lim expressed confidence in the company’s growth trajectory. “While Malacca Securities projected a 9.7% CAGR in earnings over three years, our internal targets are more ambitious at 15%.”
West River opened higher at 39.5 sen on its debut, representing a 1.28% premium over its IPO price of 39 sen per share.
Based on West River’s enlarged share capital of 357.7 million shares and the IPO price of 39 sen per share, its market capitalisation upon listing is about RM139.5 million.
Lim said the IPO performance met internal expectations. “We are happy that investors still have confidence in us. The demand in the M&E sector remains strong.”
