Ogawa planting its flag in more export markets

  • Business
  • Monday, 19 Mar 2007

HEALTH and wellness equipment retailer Ogawa World Bhd wants to penetrate the Middle East, Indian and Thai markets over the next three years. 

Executive director Louis Chong said it would start by establishing an office in each of these countries. 

“We think the Middle East is a good choice because of the people’s purchasing power. We like India and Thailand for their huge population and existing traditional massage culture, respectively,” he told StarBiz.  

“We have been researching these countries for the past two years and understand the buying patterns of its consumers.”  

Executive directors Louis Chong and Lim Mee Ling with some ofOgawa’s massage chairs.

Ogawa is a health and wellness retail chain store that over the years has become a household name in Malaysia. It designs, develops and retails its products such as massage chairs, slimming equipment, blood pressure monitors and air purifiers under its brands Ogawa and Deki

The company is slated for a listing on the main board of Bursa Malaysia early next month.  

“Ogawa started out being involved in the trading of household and electrical products in 1986 and 10 years later, ventured into the health wellness equipment industry,” Chong said. 

He said the company's products were now divided into five main categories – relaxation, therapeutic, fitness, diagnostic and hygiene.  

“Our main revenue generator are the products under the relaxation category, which include massage chairs and pillows,” he added. 

Currently, almost 80% of the group's revenue comes from its local operations while the remainder is from overseas markets. 

“We intend to increase the overseas contribution to at least 40% within the next three years,” Chong said.  

Ogawa has a total of 107 sales and distribution outlets in Malaysia, Singapore, China and Hong Kong. It also has 29 outlets through exclusive sole distributors in Indonesia, Australia and Vietnam.  

“Our immediate market expansion plans are focused on Vietnam and China,” Chong said, adding that these countries had a lot of potential due to their high populations.  

The company already has three offices in China, one each in Beijing, Shanghai and Shenzen.  

As part of its expansion plans, Ogawa will come up with at least five new products this year. “About 8% to 10% of our revenue is spent on the development of new products yearly,” Chong said. 

The company also pays a lot of attention to customer relationship management. “We emphasise after-sales service as we want customers to keep coming back to us,” he said. 

Chong said the name Ogawa meant “stream” in Japanese. “And that is how we like to think of our business – starting from a river source and slowly flowing and evolving into the mighty ocean,” he said. 

For the financial year ended June 30, 2006, Ogawa posted an after-tax profit of RM11.69mil on revenue of RM136.06mil. 

The company's initial public offering (IPO) involves the offer for sale of 36 million shares to bumiputra investors and the issue of 17.2 million new shares to the public, directors, employees, persons who have contributed to the group's success as well as for private placement. 

The par value would be 50 sen and the offer price RM1. It aims to raise some RM32mil from the IPO.  

“The company will use the proceeds for, among other things, market expansion, research and development, as well as land acquisition,” said Chong.  

“We are confident on the prospects of our stock. We believe the current volatility in the market is temporary and that we should do well.”  

Chong is optimistic that the health and wellness sector will continue to experience growth.  

According to him, the local industry was valued at about RM300mil last year, up from RM130mil in 2002. “This figure is expected to double over the next five years,” he said. 

Ogawa has appointed Public Investment Bank Bhd as adviser, managing underwriter, and placement agent for the IPO, while MIMB Investment Bank Bhd is the underwriter for the exercise.  

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