Arrow Syndicate plans year-end listing on MAI
Arrow Syndicate, a top-three player in the domestic electrical-pipe market, expects its initial public offering of 45 million shares to be listed on the Market for Alternative Investment (MAI) this year, with a facility expansion planned for next year.
Proceeds of not more than Bt50 million from the fund mobilisation are to be used for business expansion, debt repayment and working capital.
The company is preparing documents to apply to the Securities and Exchange Commission for permission to sell its IPO shares, before seeking approval from the Stock Exchange of Thailand to list on the MAI.
It has appointed Phillip Securities (Thailand) as lead underwriter for the offering. However, the IPO price has not been set as yet.
After floating 50 million new shares, Arrow Syndicate’s paid-up capital will be Bt200 million, with a par value of Bt1 apiece. Some 45 million shares are allocated for the IPO, with the remainder set aside for employees.
Lerchai Vongchaisit, as chief executive officer and founder, will hold a 57-per-cent stake in the company after the float. His current stake is 76.56 per cent.
Managing director Tanin Tan-prawat said yesterday: “We will use the funds for factory expansion as well as new machinery for new production lines for flexible ventilating conduits and polyvinyl chloride pipes, enabling us to provide one-stop shopping for products used in interior systems.”
The expansion will be at the facility in Chon Buri, close to Amata Industrial Estate.
Almost 70 per cent of Arrow Syndicate’s sales are from hot-dip galvanised steel pipes, with the remainder from polypropylene random copolymer piping (PP-R) used in water systems, ventilating pipes and building pipes used in civil engineering works.
The company’s Arrow-branded products, which serve the electrical, water and ventilating system markets, have obtained international-standard production certification such as UL (Underwriters Labora-tories) and DIN, he said.
“The company has little pressure from competition, especially cheap imported galvanised steel pipes, as they are not allowed in the market without a standard certificate issued by the state agency,” Tanin added.
Arrow products can also be exported to the US and European markets because they meet the UL standard, which certifies production for extensive safety research, scientific expertise and uncompromising focus on quality.
However, exports currently account for only 8 per cent of sales, with most overseas shipments being to the Philippines, Turkey and the United States.
Tanin said the company procured raw materials at low cost as it has high bargaining power by ordering in bulk.
The company, which has received an eight-year investment incentive for producing PP-R pipes, has a strong distribution channel via its |60 dealers around the country, Tanin said.
About 50 per cent of sales are via dealers, 38 per cent from contractors, 8 per cent from property developers and 4 per cent from producing for other brands.
Arrow Syndicate posted Bt74.3 million in net profit on revenue of Bt577.36 million in the first nine months of the year. It targets 30-per-cent sales growth for the full year, said Tanin.
He said the nationwide introduction of the Bt300 daily minimum wage on January 1 would not affect its production costs, as labour accounts for only 10 per cent of the total. Moreover, the workforce of more than 300 has been at the company for more than three years and the average daily wage is now Bt290.
