Company Background

The Company was incorporated in Malaysia under the Act on 13 April 2021 as a private limited company under the name of Unique Fire Holdings Sdn Bhd and on 8 September 2021 converted to a public limited company.

The Company is an investment holding company. UFI’s principal activity is the assembly, manufacture, and distribution of active fire protection systems, equipment, and accessories for the built environment; and UDI’s principal activity is the distribution of custom graphics designed fire extinguishers, and other active fire protection systems, equipment, and accessories and related services

Use of proceeds

1. Expansion of manufacturing facilities - 11.48% (within 36 months)
2. Expansion of geographic coverage - 27.55% (within 24 months)
3. Expansion of operational capabilities - 24.34% (within 24 months)
4. Working capital - 21.01% - (within12 months)
5. Estimated listing expenses - 15.62% (within 3 months)
   
   

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Expansion of manufacturing facilities - 11.48% (within 36 months)

1. New hand portable dry chemical fire extinguisher cylinder manufacturing lines

The company intends to allocate RM2.00 million, representing approximately 9.18% of the proceeds from the Public Issue, for the installation of two (2) new hand portable dry chemical fire extinguisher cylinder manufacturing lines progressively within 36 months from the Listing Date.

​Each new manufacturing line has an estimated output capacity of 235,000 cylinders per year. With the installation of the two (2) new manufacturing lines, the estimated output capacity will increase by approximately 200%. The estimated costs of the installation of the New Manufacturing Lines are set out below:

2. New hand portable dry chemical fire extinguishers that comply with MS and BS

The company intends to use the New Manufacturing Lines to manufacture new hand portable dry chemical fire extinguishers that comply with MS and BS for domestic and export markets. The MS-certified hand portable dry chemical fire extinguishers are targeted at the Malaysian market. The BS-certified fire extinguishers are targeted at export markets that accept BS such as Hong Kong and Saudi Arabia, which is expected to enlarge the export markets and increase export sales.

The company intends to allocate RM0.50 million, representing approximately 2.30% of the proceeds from the Public Issue, for the costs of developing the prototypes and obtaining the relevant certifications for the new MS and BS-certified hand portable dry chemical fire extinguishers, the breakdown of which is as follows:

If the actual costs for the expansion of manufacturing facilities are higher than budgeted, the deficit will be funded by internally generated funds and/or bank borrowings. Conversely, suppose the actual costs for the expansion of manufacturing facilities are lower than budgeted. In that case, the excess will be used for working capital purposes to purchase input materials for the assembly and manufacturing activities and goods for distribution.

Expansion of geographic coverage - 27.55% (within 24 months)

1. Establish new sales offices and warehouses in Johor and Penang

The company intends to allocate RM4.40 million, representing approximately 20.21% of the proceeds from the Public Issue, for the setting up of one (1) new sales office with a warehouse in Johor and Penang, respectively, within 24 months from the Listing Date.

To cater to the expansion in the business, the new sales offices are mainly to serve the existing customers and to engage with prospective new customers in the respective regions. The warehouses will be used mainly to maintain inventories of commonly purchased items so that they can fulfill the customers’ orders promptly and efficiently. The new sales offices and warehouses in Johor and Penang are expected to commence business operations by the second half of 2022 and the first half of 2023, respectively.

The company anticipates that the total costs required to set up each new sales office with a warehouse in Johor and Penang are approximately RM2.20 million, which includes mainly the following​

2. Enhance advertising and marketing activities

The company intends to allocate RM1.60 million, representing approximately 7.35% of the proceeds from the Public Issue, to enhance the advertising and marketing activities in Malaysia and targeted foreign countries or regions including Hong Kong and the Middle East. The company intends to target Hong Kong due to the dealing with Hong Kong customers in FYE 2021 with a revenue of RM0.53 million (0.83%), and plans to export the new BS-certified hand portable dry chemical fire extinguishers to Hong Kong. The company intends to target the Middle East as one of the suppliers, Orient Corporation has business and customers in that region.

The estimated costs for the advertising and marketing activities are set out below:

If the actual costs for the expansion of geographical coverage are higher than budgeted, the deficit will be funded by internally generated funds and/or bank borrowings. Conversely, suppose the actual costs for the expansion of geographical coverage are lower than budgeted. In that case, the excess will be used for working capital purposes to purchase input materials for the assembly and manufacturing activities and goods for distribution.

Expansion of operational capabilities - 24.34% (within 24 months)

1. Increase storage capacity and implement a warehouse management system

The company intends to allocate RM3.35 million, representing approximately 15.38% of the proceeds from the Public Issue, to increase the storage capacity and implement a warehouse management system (“WMS”), the breakdown of which is set out below:

These new mezzanine levels will increase the usable floor area of the Operational Facility by approximately 10,228 sq ft or 8.92% from approximately 114,656 sq ft to approximately 124,884 sq ft. This new usable floor area will be entirely allocated for storage use, which will increase the storage area by 67.59% from approximately 15,132 sq ft to approximately 25,360 sq ft.

In addition, the WMS to digitalize and automate the inventory management functions by the second half of 2022 will improve inventory management and facilitate faster and more accurate storage and retrieval of goods. This is necessary to view that the current inventory management is carried out manually, and also to enhance the operational capabilities to support the business strategies and plans set out. To support the increased warehouse capacity, part of the IPO proceeds will also be used to purchase three (3) forklifts and two (2) new lorries by the first half of 2024 to enhance the warehousing and delivery operations.

2. Digital fire extinguisher identification data systems and enhance IT system

The company intends to allocate RM1.14 million, representing approximately 5.22% of the proceeds from the Public Issue, for the implementation of digital fire extinguisher identification data systems and enhancement of its IT system, the breakdown of which is set out below:

To enhance the IT system to increase the efficiency of the operations, the company will purchase desktop computers and office software for the technical, administrative, and other office staff based at the head office, and develop a client portal that enables its authorized customers to access eFEIS data for their fire extinguishers by the first half of 2023. The client portal also allows its customers to conduct their purchases online and track their order status. The company will also purchase additional software licenses by the first half of 2023 to allow the new sales offices and warehouses that the company intends to set up to access the existing ERP system.

3. Install rooftop solar photovoltaic system

The company intends to install a rooftop solar photovoltaic (“PV”) system at the existing Operational Facility in Shah Alam, Selangor, by the second half of 2022 to reduce the utility cost.

The company will allocate RM0.81 million, representing approximately 3.72% of the proceeds from the Public Issue, for the full costs of engaging a third-party vendor to construct the solar PV system, which includes the expenses of designing the solar PV system, submission to the relevant authorities and the installation of the solar PV system. As at the LPD, the company has engaged a third-party service provider to design the solar PV system.

Working capital - 21.01% - (within12 months)

The Group’s working capital requirement is expected to increase in tandem with the expansion of the business. After taking into consideration of the liquidity and capital resources position as detailed in Section 11.3.4 of this Prospectus, the company intends to allocate RM4.58 million, representing approximately 21.01% of the proceeds from the Public Issue, as working capital to finance the Group’s future operations mainly in respect of the purchase of input materials and goods for distribution. The breakdown of the allocation is set out below:

The input materials include among others, empty cylinders, parts for fire hose reels, and fire hoses extinguishing agents are materials purchased for assembly and manufacturing activities, whereas the goods for distribution are ready for sale items which include, among others, fire protection equipment and accessories, sprinkler systems and wet and dry riser systems and hydrants, for distribution. They intend to purchase the input materials and goods for distribution by the second half of 2022 and the first half of 2023 respectively, which is in tandem with the commencement of business operations of the new sales offices and warehouses in Johor and Penang. This working capital allocation is expected to enhance the Group’s liquidity and cash flow position and reduce the reliance on external financing to support the expected growth in the daily operations.

Business model

The business model is depicted in the following diagram:

The company is involved in the assembly, distribution, and manufacture of active fire protection systems, equipment, and accessories for the built environment. The fire protection systems and equipment are designed to combat Class A, B, C, E, and F fires. As such, the fire protection systems and equipment use extinguishing agents including CO2, HFC, wet and dry chemicals, and foam, as well as fire protection systems and equipment that are attached to a supply of water.

Assembly

The company assembles the following types of fire protection systems and equipment:

1. fire suppression system using CO2 and HFC-227ea as extinguishing agents; and
2. fire protection equipment includes fire extinguishers using CO2 (hand portable and trolley mounted), dry chemical (trolley mounted), and foam (hand portable and trolley mounted) as extinguishing agents, fire hose reels, and fire hoses.
   

The company assembles fire protection systems and fire protection equipment under the Unique, Unique227, Yama, and Commander brands, as well as third-party brands such as Orient and Kidde brands.

Distribution

The company distributes the following types of fire protection systems, equipment, and accessories under the brands as well as third-party brands:

1. fire suppression systems including sprinkler systems, wet and dry riser systems and hydrants, and wet chemical fire suppression systems;
2. fire protection accessories including fire detection and alarm devices, batteries, cabinets, and fire blankets; and
3. fire protection equipment namely fire hoses.
   

The company distributes fire suppression systems and fire protection accessories under the Unique brand, which are manufactured by external parties for them under its brand. The company is also an authorized distributor of third-party brands of fire suppression systems, fire protection equipment, and accessories including brands such as Demco, System Sensor, CD, Viking, Kidde, and ZYfire. They also distribute third-party brands of fire protection accessories including GP and Program, which are not under authorized distributorship.

Manufacturing

The company manufacture fire protection equipment namely, hand portable dry chemical fire extinguishers under the Unique brand.

Other activities

The other business activities include assisting in Bomba eFEIS application, sales of dry chemical fire extinguisher refilling machines, and servicing of fire protection equipment

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