Plytec banks on construction method engineering

PETALING JAYA: Plytec Holding Bhd expects good growth over the next few years due to its investments in the construction method engineering (CME) business and the digital design and engineering services.

Group managing director Yang Kian Lock said the company is widening its CME solutions segment, venturing upstream into the manufacturing of temporary works equipment and expanding its factory in Olak Lempit, Selangor.

Yang said the construction market trend has seen a shift in terms of sales and rental proportion.

Hence, Plytec will allocate 75% of its capital expenditure (capex) to rental and the remaining 25% to sales, as compared to the previous years when 65% and 35% of capex was for sales and rental, respectively.

“We foresee the rental revenue will keep coming up, that is why we are focused on investing in the equipment,” he said at the company’s listing ceremony on Bursa Malaysia yesterday.

Plytec shares were actively traded on its maiden trading day, and tested a high of 36 sen and low of 32.5 sen in intraday trade before closing 2.5 sen lower at 32.5 sen for the day.

Plytec has raised a total of RM37.1mil through an offering of 106 million new ordinary shares at 35 sen per share.

Some RM9mil of the money raised will be allocated to the repayment of bank borrowings, while another RM8mil is earmarked for capex.

The CME and services company has budgeted RM7.8mil for the expansion of its factory and centralised labour quarters in Olak Lempit.

Another RM6.3mil will be used for working capital, while RM6mil will go toward listing expenses and purchasing of software systems and hardware.

Yang said Plytec is now ready to enter the Philippines as part of its expansion plan to other Asean markets.

He said the company is also looking at opportunities in Sabah and Sarawak.

“We are already there as a digital transformation consultant with the states, so we have a good starting point to take up a lot more partnerships from there,” he said.

He added that the group’s expansion to Hungary will act as a “seed” for Plytec to grow its services in Europe.

Chief operating officer Louis Tay Chee Siong said the construction industry is lacking industrialised processes as well as digitalisation, which could lead to it becoming one of the least productive industries in Malaysia.

He said the need to incorporate both processes are necessary to push the industry forward and solve the issue of lack of productivity.

Tay said the challenging market environment and an unstable supply chain has not directly impacted the group’s business but the impact is more on the contractors end.

“As service providers, we need to seek ways to facilitate and search for the best outcome.

“There’s no direct impact on us but we are steering our building materials business more towards the quality of the margin we want, and thus we are always careful in selecting our customers,” he added.

Plytec will also look into ways to reduce dependency on foreign workers and source more local workers in the future.