Company Background

The Group has been in business for 38 years. The Company was incorporated in Malaysia under the Act on 30 August 2021 as a private limited company under the name of Berjayapak International Holdings Sdn Bhd and changed the name to L&P Global Sdn Bhd on 27 January 2022. The company was subsequently converted to a public limited company on 22 March 2022. The Company is principally involved in investment holding and the provision of management services. The Group’s current corporate structure is illustrated below:

The company is an integrated industrial packaging solutions provider where the solutions are integral parts of supply chain management that enable optimal use of industrial packaging products through cost-effective and efficient movement of goods throughout the supply chain, inventory management, and space usage.

Use of proceeds

1. Capital expenditure - 29.50% (within 36 months)
2. Business expansion - 5.90% (within 36 months)
3. Repayment of borrowings - 14.75% (within 6 months)
4. Working capital - 38.35% (within 12 months)
5. Estimated listing expenses - 11.50% (within 3 months)

Capital expenditure - 29.50% (within 36 months)

Part of the Group’s business strategies and plans is to expand the operations in Johor by constructing a new, larger factory (“Proposed New Johor Factory”) which will include the manufacturing of components, and larger assembly and storage space. The proposed New Johor Factory will produce boxes and crates as well as provide packing services and facilitate the circular supply services.

The construction for the Proposed New Johor Factory is expected to be commenced by Q2 2024 and completed by Q3 2025. The estimated construction costs based on the initial planning are as follows:

Business expansion - 5.90% (within 36 months)

1. Setting up of an assembly plant and storage in the Klang Valley (“Proposed New KV Factory”)

The Group’s business strategies and plans include expanding the geographical presence domestically to the Klang Valley. The company intends to set up the Proposed New KV factory to carry out assembly works for final products comprising boxes and crates, as well as provide packing services and facilitate the circular supply services.

2. Purchase of machineries

In conjunction with the plan to expand the operations / geographical presence in Johor, Klang Valley, and Singapore, additional machineries are required to support the business operations in various locations. The company intends to allocate RM1.39 million, representing approximately 4.09% of the gross proceeds from the Public Issue, to purchase the following new machineries:

Repayment of borrowings - 14.75% (within 6 months)

The company intends to allocate RM5.00 million, representing approximately 14.75% of the gross proceeds from the Public Issue, to pare down part of the Group’s outstanding borrowings with priority given to the higher interest-bearing facilities as follows:

Working capital - 38.35% (within 12 months)

The Group’s working capital requirements are expected to increase in tandem with the expected growth in the business. The cost of raw materials is the main component of the cost of sales, representing approximately 78.00%, 82.95%, 83.51%, and 82.78% of the total cost of sales for the past 3 FYEs 2019, 2020, 2021, and FPE 2022, respectively. The intends to allocate RM13.00 million, representing 38.35% of the gross proceeds from the Public Issue, to supplement the working capital requirements of the Group. The proceeds will be used for the purchase of raw materials, mainly consisting of engineered wood and natural wood.

Business model

The company is an integrated industrial packaging solutions provider. Integrated industrial packaging solutions are integral parts of supply chain management that enable optimal use of industrial packaging products through cost-effective and efficient movement of goods throughout the supply chain, inventory management and space usage.

Further, the company also contributes to the environmental aspect of supply chain management with the use of recyclable materials and the recycling of industrial packaging products. Ultimately, the solutions contribute to effective supply chain management which consequently enhances the value and profitability of supply chain participants including suppliers, manufacturers, logistic service providers, distributors and retailers.

The Group’s business model is as illustrated below:

The integrated industrial packaging solutions comprise the following:

1. Design and manufacturing of wooden industrial packaging products;
2. Provision of packing services;
3. Provision of circular supply services; and
4. Trading as value-added services,

which is illustrated and detailed as follows:

Click here to continue the IPO - L&P Global Berhad (Part 2)

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