The Niro Ceramic Group plans to launch its initial public offering (IPO) in mid-2024 and utilise the proceeds raised for the company's strategic initiatives to the bottom line and accelerate sales growth.
Without disclosing the amount the company plans to raise, managing director (MD) Ian Kok said the tile maker and distributor is looking forward to being listed on the main board as they foresee valuable long-term value for Niro Ceramic's trajectory.
"The capital generated from the IPO will primarily be directed towards key areas such as distribution, marketing, and product development.
"Our intention is to maximise the value of these funds and strategically allocate them to areas that will supplement our growth, enhance our competitive advantage, and ultimately benefit our shareholders," he told Bernama.
Kok shared that being a listed company would allow Niro Ceramic to boost substantial capital from the public market to help finance and diversify growth opportunities.
He said that although the company would be required to comply with stringent regulatory requirements to become a listed company, the steps helped fortify transparency and corporate governance.
"As a long-term result, the reputation of Niro Ceramic amplified and helped to draw in more distinguished investors.
"The IPO exercise also brings Niro Ceramic to the forefront, enhances brand visibility and industry acknowledgement, strengthening its position as a leading brand in the Malaysian ceramic industry," he said.
Finding the right people
Kok said the lockdowns during the Covid-19 years of 2020 and 2021 were disruptive to the company, and even after the country reopened, the businesses were still relatively slow.
"If construction activity slows, tile suppliers' business will suffer as well," he said.
Kok said that one of the group's biggest challenges, if not the most significant, is attracting the right people.
He said recruiting people remained difficult due to the low unemployment rate, which impacts many nations, not only Malaysia.
"Even though there are no more lockdowns, one of the most difficult challenges for the construction industry was finding enough workers.
"As we try to expand our business in neighbouring countries, we will invariably need to bring in new people.
"What the company needs to do is reflect internally on how we can make ourselves attractive to attract the right talent, as well as how we will retain them once they join the company.
The rising cost of electricity, Kok said, was another major challenge.
He said that energy costs have risen dramatically in most parts of the world and that the company expects the cost to continue to grow.
"This will be a challenge that all manufacturers, including us, will have to address to mitigate some of these cost increases, whether through new products, the way we do marketing, or how we can save costs in other areas of the business," he said.
Driving towards sustainability
Meanwhile, Kok said there is a rising expectation for companies, especially public-listed companies, to be environmentally, socially, and governance (ESG) compliant.
To meet this expectation, he said companies must have a corporate structure in place to drive all these initiatives.
The Niro Ceramic MD told Bernama that the group already has a separate structure that is apart from the board of directors and includes all senior members of the organisation.
"First and foremost, it must be a top-down strategy, with leadership taking ownership of this effort.
"From here, we will get into the finer elements of what we can do to keep in step with ESG criteria," he said.
Kok said that among the measures Niro Ceramic took towards sustainability is powering its Shah Alam headquarters with solar energy.
He said that as ESG requirements get more stringent and demanding, the group is triggering many efforts linked to cost savings and energy efficiency.
"The most recent accomplishment is obtaining an environmental product declaration (EPD) accreditation for our Malaysian and Indonesian facilities.
"This EPD accreditation also benefits our clients, builders, and property developers, as property developers will gain a lead point when they use our product," he added.