Business OverviewOur Group's business model is summarised below:
The principal business activities of our Group are in the manufacturing and processing of secondary stainless steel products, and trading of industrial hardware.
Core Revenue Stream
Our Group’s revenue streams are derived from the following:
(i) Manufacturing of stainless steel tubes and pipes;
Our Group has the in-house expertise and capabilities to manufacture welded stainless steel tubes and pipes. The three (3) main categories of welded stainless steel tubes and pipes are as follows:-
Ornamental stainless steel tubes and pipes for applications such as grilles, gates, window frames and doorframes, railing systems such as handrails and balustrade, and marine deck railing, ladders, poles and furniture parts;
Automotive stainless steel tubes and pipes for applications such as bull bars, grille guards, real single pipe bumpers, pick-up truck, bed rails, exhaust systems and light guards; and
Stainless steel tubes and pipes for applications such as water piping and sanitary piping for buildings and water filter equipment.
(ii) Manufacturing of stainless steel industrial fasteners, rigging accessories and components;
Our Group is also involved in the manufacturing of stainless steel industrial fasteners, rigging accessories and components. Industrial fastener is a mechanical device that holds or joins two (2) or more components in definite positions with respect to each other.
The types of stainless steel industrial fasteners, rigging accessories, and components commonly manufactured by us include amongst others, bolts and nuts, studs, coach screws, u-bolts, shackles, and swivels.
(iii) Processing of secondary stainless steel products; and
Our Group’s capabilities also extend to processing secondary stainless steel flat and long products which involves incorporating slitting and shearing of steel sheets, as well as cutting of secondary stainless steel long products including round bars, flats and angles.
(iv) Trading of industrial hardware.
Our Group is also involved in the trading business for a wide range of industrial products including marine hardware and consumables, and other industrial hardware. Currently, our Group has approximately 10,000 products of different specifications for our trading operations. Our trading operations complement the range of products manufactured and processed by us. This enables us to meet many of our customers’ requirements to provide convenience and to enhance customer loyalty.
We service manufacturers, stainless steel fabricators, shipbuilders, architects and building contractors and industrial hardware wholesalers and retailers. The extensive coverage of the different types of customers will provide us with significant growth opportunities as well as mitigate against any over dependency related to any single customer.
Competitive Advantages and Key Strengths
Our Group operates on a platform that enables us to sustain as well as provide future growth for the business. Our competitive advantages and key strengths are as follows:
(i) One-stop Supply Centre for Secondary Stainless Steel Products
We provide a wide range of secondary stainless steel products including tubes and pipes, industrial fasteners, rigging accessories, and components and are able to serve as a one-stop secondary stainless steel supply centre for our customers. The one-stop supply centre enables us to benefit from economies of scale from our diverse range of products and more importantly, provides convenience to our customers.
(ii) Critical Supporting Industry
Our Group plays a critical supporting role for the entire supply chain of end user industries. This is mainly predicated by the following observations:
Stainless steel secondary products such as stainless steel tubes and pipes, stainless steel sheets, stainless steel round bars, flats and angles, are used as the main input materials to manufacture finished stainless steel products, which are ultimately used in a diverse range of industries. Some examples include stainless steel sheets which are used for industrial applications such as fabricating machinery and equipment, process equipment, storage tanks and pressure vessels, tubes and pipes, architectural applications such as decorative wall panelling, and consumer products such as cutlery, utensils and kitchen equipment.
As for stainless steel tubes and pipes, these are used for architectural and ornamental applications such as fabricating into gates, window frames and doorframes, fences, handrail systems, automotive applications such as manufacturing into bull bars, grille guards, exhaust systems as well as used for water piping and food processing equipment.
The wide usage of secondary stainless steel products provides us with opportunities to further enlarge our customer base.
(iii) Broad Range of Facilities
Our Group has a broad range of facilities and has made significant investment in machineries and equipment including auto slitting and shearing machines, forming and welding machines, polishing machines, threading machines, bending and forming machines, blanking machines, and testing equipment, for our manufacturing and processing operations. Our broad range of production facilities enables us to provide an efficient turnaround time and allows us to meet our customers’ requirements and product specifications as all the relevant processes are undertaken in-house.
This provides our Group with a competitive advantage over other smaller operators who may have a limited range of machinery or production facilities.
(iv) Synergies for Cross-Selling
Our Group has a wide customer base and an extensive portfolio of products. This provides us with considerable synergies for cross selling of products to existing and new customers. This reduces our cost of marketing and distribution, and at the same time provides growth opportunities for our business.
(v) Wide Customer Base for Business Growth
With our Group’s extensive range of manufactured and processed secondary stainless steel products, and traded industrial products, we are well positioned to supply the needs of a large customer base in a diverse range of end-user industries. Currently, our Group has an established wide and active customer base of approximately 1,000 customers spread across six (6) countries, including Malaysia. This large customer base will provide us with the platform to sustain and grow our business.
(vi) Operates in a Relatively Large Industry
As a manufacturer and processor of secondary stainless steel products, our Group operates in a relatively large secondary stainless steel industry with a market size of approximately RM1 billion based on apparent consumption of stainless steel for 2009.
(Source: Independent Assessment of the Stainless Steel Industry focusing on Stainless Steel Tubes, Pipes and Sheets in Malaysia prepared by Vital Factor Consulting Sdn Bhd)
The large size of the stainless steel industry would provide significant business opportunities for our Group.