News 1117 views last update:6 Aug 2012

Malaysian PeterLabs to go public

Animal health and nutrition products maker PeterLabs Holdings Bhd is slated to be listed on the ACE Market of Bursa Malaysia on July 26.

PeterLabs executive director Dr Teo Kooi Cheng said the company with feed additives is diversifying into aquaculture to capture the vast opportunity in the marine market.
PeterLabs is involved in the manufacture, distribution, and trading of animal health and nutrition products such as animal feed additives, environment maintenance products and veterinary pharmaceuticals.
“We are trying to develop and enhance our additives for the aquaculture industry. It is still a developing industry compared with Thailand,” he told StarBizWeek in an interview.
Dr Teo said it was a good time for the group, which is already trading some additives for the acquaculture industry, to come up with its own products.
The company intends to introduce its additives for aquaculture by the middle of next year and it is currently conducting trials in some products.
New markets
Apart from expanding its products portfolio, managing director Lim Tong Seng says PeterLabs is also looking at penetrating new exports markets such as Bangladesh, Indonesia and Saudi Arabia.
“We are still in the negotiation stage with Bangladesh,” Lim said, adding that it exports a small percentage to Pakistan, Nepal, Thailand and Taiwan.
PeterLabs has been actively participating in overseas tradeshows to promote the group’s products and to build up contacts.
GMP certification
Lim said the new plant in Nilai which is GMP-certified would open up new opportunities for the group for markets that are stringent.
He added that it would also create opportunity for its competitors who are non-GMP compliance to contract out their production to PeterLabs.
PeterLabs currently has a non-GMP-compliant factory in Shah Alam, thus the group has started moving its production progressively to its new RM12.5mil (€ 2.93m) plant in Nilai. The old plant will be closed down once the production has been fully integrated into the new plant.
The plant’s total capacity is only used for 50% thus providing room for further expansion.
Strong on home market
PeterLabs currently has a 19.1% market share in the animal feed additives market Malaysia in 2010. According to IMR Report by Protege Associates, the local animal health and nutrition market was valued at RM529mil (€125m) in 2009.
PeterLabs posted an average annual growth rate of 17% and 37% in revenue and net profit respectively.
For the financial year ended Dec 31, 2010 (FY10), PeterLabs posted a net profit of RM5.95mil (€1.4m) on revenue of RM40.7mil (€9.6m) . Its net-profit margin increased to 14.6% in FY10 from 13% in FY09.
Lim says the company expects better performance due to its expansion plans such as venturing into new products portfolio, new exports market and new manufacturing plant.
Repay bank loans
With the listing exercise of 15 million new shares at 30 sen a piece are given out.An offer for sale of about 35.9 million shares will be allocated to identified investors.
"We hope to raise about RM4.5 million (€1 million) from the flotation exercise with proceeds to be used to partly repay bank loans and listing requirements," Lim said.

The company’s financial controller Evone Yap says it does not have a dividend policy in place right now but it plans to pay out 30% of its net profit to shareholders in future.

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