IQ aims for top two spot

  • Business
  • Monday, 12 Sep 2005

IQ Group Holdings Bhd, which designs and makes passive infrared (PIR) sensor lighting and motion sensors, aims to become either the leading or second-place provider of home enhancement, security and convenience products in all its markets. 

Managing director Graham Clancy said the group's products were principally exported to Britain, Europe and Japan. The majority of its customers are those in retail do-it-yourself (DIY) distribution, primarily within the European, Japanese and North American markets, as well as major international electrical distribution groups.  

The customers include Homebase Ltd and Costco Wholesale Corp in Britain, the Hager Group in Europe, Optex Group in Japan, and RAB Lighting Inc in the United States. 

Clancy said IQ Group enjoyed long-term business relationships with its customers.  

Graham Clancy with the group's video entry products.

“The average length of partnership between the group and its top 20 customers is seven years, with 95% of these customers dealing with the group for three years or more,” he said. 

At present, 50% of the group’s revenue is derived from its original equipment manufacturer (OEM) business and the balance from the sale of its own products under the brand name IQ Group.  

“Our business in the earlier days was predominantly OEM-based. The downside was that it made us very dependent on our customers – our future would be compromised if our OEM customers bought from other suppliers. 

“To balance that, we started our own brand to help make the group more well known internationally. Having our own brand name also means being in control of our own destiny,” Clancy said. 

However, Malaysian consumers will not be able to find IQ Group’s products, which are based on the DIY concept, in this country. 

“Market conditions are just not right at the moment,” he said.  

“For example, the cost is still low to obtain the services of an electrician. Instead, we want to focus on our existing markets where our strengths are. We also want to concentrate on further developing our skills and innovating new products to enhance our competitive advantage.” 

PIR controlled security lighting

Clancy added that this would help the company compete with lower cost products from China. 

Currently, Britain contributes about 54% to group turnover, Europe 18.7%, Japan 15.7% and the US 6%. 

He said IQ Group planned to expand its market in the United States. 

According to Clancy, the US home improvement market is worth US$130bil. The motion sensor security lighting market, at manufacturing prices, is valued at US$109mil. 

“The motion sensor security market is expected to grow 6% every year. It is a huge market, and we plan to distribute our own brand there. Our products have been developed and are ready to go into production,” he said, adding that the company hoped to penetrate the US market next year with its own brand. 

IQ Group, which is en route to a listing on the main board of Bursa Malaysia next month, plans to raise RM23.6mil from the exercise. 

Of the total, RM15mil will be used for research and development activities, RM5.9mil for working capital and RM2.7mil for listing expenses. 

Clancy said the listing proceeds would enable the company to develop new products, including intelligent home security products and controls and Internet-based security systems, planned for 2006 to 2008. 

Under the listing exercise, IQ Group will be making an offer for sale of 11.1 million RM1 shares at RM1.80 each to approved bumiputra investors, and a public issue of 13 million shares. 

Of the 13 million shares, 5.1 million will be made available to the public and 7.9 million to eligible directors, employees and persons who have contributed to the success of the group. 

The company's prospectus is expected to be out in the middle of the month. 

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