KUALA LUMPUR: Leon Fuat Bhd, whose shareholding is 70.87% controlled by the family of its founding members, is open to the idea of increasing its public shareholding spread.

“But we have not identified any investor so far,” said executive director Calvin Ooi Shang How. “We are open to talks if any opportunity arises, but cash call is not in our agenda as of now.”

Ooi, who is the son of Leon Fuat co-founder and managing director Datuk Seri Ooi Bin Keong, was speaking to the media after the group’s annual general meeting yesterday.

He agreed that now was a good time to broaden the group’s shareholding spread following a rise in the share price. Yesterday, the stock gained 0.5 sen or 0.61% to 82 sen, giving the group a market capitalisation of RM252.65 million.

Year to date, the price has appreciated by 74.47% from just 47 sen on Jan 3.

“The other steel counters have also gone up a fair bit recently, but our focus now is to further grow the business, there are still opportunities in the market and we hope we can capture them,” said Ooi.

“We are still cautiously optimistic about our outlook moving forward as one of our major costs is raw material, whose prices can be very volatile. But so far demand has been strong, that is why we are confident to expand our operation,” he said.

Leon Fuat is in the midst of building its steel pipe manufacturing plant in Bandar Suleiman, Port Klang, a new business venture meant to broaden the group’s income stream.

Ooi said the plant is expected to commence operation by the second half of 2018.

“The budgeted investment for this venture is about RM50 million, but the final figure may be different because it will depend on the plant specification, equipment and machinery we want,” he explained.

With this new venture, Ooi said Leon Fuat’s current gearing ratio of 0.76 times is expected to increase to around 1.0 times.

Leon Fuat’s two core businesses are steel products trading and processing steel coils into semi-finished goods.

“This year (financial year ending Dec 31, 2017), we expect to see some growth in our revenue, but not a big one,” he said.

“Even with the steel pipe business next year, it will not start with very big volume,” he said. “Of course we want to sell [the products] overseas, but in the beginning stage we will focus on selling to domestic customers first,” he added.

On the relocation of Leon Fuat’s operation in Sungai Besi due to a compulsory acquisition of the site by the government, Ooi said the group has identified several plots of land within the Klang Valley as replacement.

“The compensation we got is definitely enough for us to re-establish and relocate our operation there. Currently our other production plant is still able to fill in the gap left by the Sungai Besi plant, so there is no issue,” he said.

The compulsory acquisition was to make way for the mass rapid transit Sungai Buloh-Serdang-Putrajaya line project, whereby the government paid a compensation of RM45.84 million to Leon Fuat to buy its plots of land, which collectively spans 3,345.79 sq m.