FRESH from making inroads into China, Ecofuture Bhd is eyeing the Middle East as the next major market for its Ecomat, a fibrous mat made from oil palm residue for use in soil erosion prevention and in combating desert and sand storms.
Ecofuture chief executive officer Yeo Kim Luang said the company, which was involved in oil palm biomass, milling and sale of crude palm oil and kernel, made inroads into China using Ecomat in a desert and sand storms control trial project in Beijing two years ago.
She said the company had in April entered into a four-year agreement worth RM3mil to extend the project to other parts of China.
Yeo said two countries in the Middle East, Kuwait and Lebanon, was also trying Ecomat for desert storm control.
“Kuwait has been at the trial stage for the past one year, and the results are positive.
“We are looking forward to them placing an order by early next year,” she said after an underwriting agreement signing with Affin Merchant Bank Bhd in Kuala Lumpur yesterday in conjunction with Ecofuture's listing on the Mesdaq market.
Affin Merchant is the adviser, sponsor, sole placement agent and sole underwriter for Ecofuture's listing.
Yeo said the potential market for Kuwait was substantial, estimated to be around RM100mil.
She said, the company was also eyeing Taiwan, Japan and South Korea.
For the listing exercise, Yeo said, Ecofuture was looking to raising about RM10.9mil, of which RM5.6mil would be spent on construction of a new factory for biomass operations and purchase of plant and machinery.
Another RM1.6mil would be spent on installation of boilers and turbines, RM800,000 on research and development, RM700,000 on expansion of existing biomass operations, RM350,000 on working capital for biomass operations, and RM1.8mil on listing expenses.
She said the company was offering 43.635 million new ordinary shares of 10 sen each at an issue price of 25 sen.
Of the total, 20.945 million shares will be made available for private placement to selected investors and institutional investors, 11.963 million for the public, and 10.277 million for eligible directors and employees.
She said Ecofuture planned to set up the new factory for biomass operations at its manufacturing plant in Segamat, Johor, by early next year.
“The new building is expected to increase our capacity by 50%,” she said, adding that its production line would be increased from two lines to three, and daily production from 10,000 sq metres to 15,000 sq metres.
For the financial year ended Dec 31, 2003, the company posted a net profit of over RM1mil on revenue of between RM4mil and RM5mil.
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