KUALA LUMPUR: Main Market-bound Pantech Global Bhd does not anticipate any direct impact from the tariffs announced by US President Donald Trump on steel and aluminium.
Managing director Adrian Tan affirmed that the current geopolitical tensions and anticipated raw material price hikes would also not have an impact on the group’s performance.
Instead, he pointed out the risks from the imposition of anti-dumping obligations.
“If there happens to be any files against us, then we will have to fight the case,” Tan said yesterday at a press conference here after Pantech Global’s prospectus launch.
Trump had announced new plans to impose 25% tariffs on all steel and aluminium imports into the United States.
Pantech Global, a subsidiary of Pantech Group Bhd, is principally involved in the manufacturing and exporting of butt weld pipe fittings and welded pipes – which is primarily made out of stainless steel.
Tan added that Pantech Group had previously won two cases and was cleared of the anti-dumping circumventions.
When asked about the fluctuation of steel prices, he said it would not impact the group negatively.
He explained that since Pantech Global is involved in downstream operations, the only factor that needs to be looked at is the price of nickel – which constitutes about 8% of its products and 15%-16% of its production costs.
“But over the last two years, prices have been steady.
“Even if prices were to go up, the demand for our products becomes higher and we will generate better profit.
“But, if we are talking about normal steel, it does not really impact us,” he said, adding that even if prices were to go up, only then would Pantech Global pass on the costs to its customers.
Pantech Global aims to raise RM178.31mil from its initial public offering (IPO) as it makes its way to list on the Main Market of Bursa Malaysia, scheduled on March 3, 2025.
The IPO exercise involves the issuance of 262.23 million new ordinary shares at a price of 68 sen a piece.
Upon listing, Pantech Global will have an enlarged issued share capital of 850 million shares, as well as an expected market capitalisation of RM578mil.
Tan stated that the majority of its proceeds will be set aside for expansion plans, with an allocation of RM67.32mil or 37.75% of the proceeds.
The group’s expansion plans include the establishment of a new factory and corporate head office in Selangor, a new warehouse in Johor and the set up of an additional pickling facility at its current Johor factory.
Meanwhile, another big chunk of the proceeds will be allocated for capital expenditure worth RM64.68mil for the acquisition of its existing Klang and Johor factories, and purchase of new machinery and equipment for its operations.
The remainder of the proceeds will be set aside for working capital (RM22.72mil), repayment of bank borrowings (RM15mil) and listing expenses (RM8.6mil).
Additionally, Tan shared that post-listing, the group is looking to tap into new markets, including the North African and South American markets.
This will be on top of its current markets, which consists of 28 countries worldwide.
