PANTECH Global Bhd, a leading manufacturer of butt weld pipe fittings and stainless-steel welded pipes, is not expected to be significantly affected by U.S. President Donald Trump’s proposed 25% tariff on steel and aluminium imports.
This assessment comes from the company’s group managing director, Adrian Tan, who spoke to the media following the launch of the company’s prospectus.
Tan explained that since the tariff will be uniformly applied to all countries, it creates a level playing field.
He emphasised that if every nation faces the same 25% tariff, there would be no competitive disadvantage for Pantech Global. “If every country is at 25 percent, all things will be equal, and it will make no difference to us.”
The company specialises in manufacturing products that are designed to withstand extreme temperatures, high pressures, corrosive environments, and other challenging conditions. These products, primarily butt weld pipe fittings and stainless-steel welded pipes, are widely used across industries including oil and gas, petrochemicals, chemicals, semiconductors, water treatment, and shipbuilding, all of which require fluid transmission solutions.
Tan pointed out that the specific details of the tariff plan remain unclear and that such tariffs typically affect upstream steel and aluminium producers, while Pantech operates within the downstream sector. This distinction means that Pantech’s operations are less likely to be impacted by the proposed tariffs, which are primarily aimed at raw material producers.
The tariff announcement by Trump, made on Sunday, is part of a broader strategy that includes imposing reciprocal tariffs on countries that impose duties on U.S. exports. Despite the uncertainty surrounding the full scope of these tariffs, Tan remains confident that the company’s operations will not face substantial disruption.
Pantech Global’s IPO Plans
Looking ahead, Pantech Global is set to raise around RM178.32 million through its initial public offering (IPO) on the Main Market of Bursa Malaysia, scheduled for March 3, 2025. The IPO marks the first listing on the Main Market in 2025 and is expected to draw significant investor interest.
The IPO involves the issuance of 262.23 million new ordinary shares at an issue price of 68 sen per share. Upon listing, the company is projected to have a market capitalization of RM578 million, based on the enlarged issued share capital of 850 million shares.
A retail tranche of 21.25 million shares will be made available for public subscription, with the IPO offering investors a 30.85% stake in Pantech Global. The remaining shares will be held by Pantech Group Holdings Bhd, the company’s parent listed on the Main Market.
The company plans to allocate the proceeds from the IPO across several key areas. A significant portion, 37.75% (RM67.32 million), will be invested in business expansion initiatives. This includes the establishment of a new factory to expand its range of fittings production, as well as the development of a corporate headquarters in Selangor.
In addition, 36.27% (RM64.68 million) of the proceeds will be directed towards capital expenditure, which will include purchasing a new warehouse in Johor for improved order fulfilment and the construction of a new pickling facility to accommodate longer pipes.
Pantech Global is also looking to enhance its operational capabilities by acquiring its rented factory in Klang and land in Johor, as part of its efforts to streamline operations for the upcoming listing.
The company intends to invest in upgrading machinery and equipment, including the addition of new automated systems to boost production efficiency.
Other portions of the IPO proceeds will be used for working capital (12.74% or RM22.72 million), the repayment of bank borrowings (8.41% or RM15 million), and to cover listing expenses (4.83% or RM8.6 million).
Global Market Presence
Pantech Global has a strong international footprint, with its main markets including the United States, Malaysia, Taiwan, Indonesia, Canada, and Europe. Together, these regions accounted for nearly 94% of the company’s total revenue for the financial year ending February 29, 2024, and the first six months of the 2024 financial year, ending August 31, 2024.
In 2023, Pantech Global held a dominant position in the Malaysian export market for butt weld pipe fittings, commanding a market share of 66%. It also secured 16% of the Malaysian market for stainless steel welded pipes.
Alliance Islamic Bank Bhd is serving as the principal adviser, underwriter, and placement agent for Pantech Global’s IPO. The company’s listing represents a significant milestone for Pantech as it continues to expand its global presence and solidify its position as a leading player in the manufacturing of high-quality pipe fittings and welded pipes.
As Pantech Global moves forward with its IPO plans, it aims to strengthen its market position and enhance its production capabilities, positioning itself for long-term growth in a competitive global market. – February 10, 2025
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