With listing beckoning, Zantat looks ahead with optimism
LED by the second generation of the founding family, Zantat Holdings Bhd looks set to be going places, with fresh new ideas from its young management team.
ACE Market-bound tentatively for March 27, the calcium carbonate (CC) powder producer has been pretty busy of late, with a slew of activities, both short and long term, in the pipeline waiting to be executed.
The company over the week launched its initial public offering (IPO) prospectus, announcing its plan to raise approximately Rm14mil. About a quarter of the proceeds will be utilised to repay bank borrowings with high interest rates.
Speaking to Starbizweek in an exclusive interview, Zantat managing director Ivan Chan Bin Iuan says while the general public is mostly unfamiliar with the CC industry, the company has been fortunate as it is a sector that has proven its resilience through economic ups and downs over the decades, including during the pandemic-induced lockdowns from 2020 to 2022.
“CC is a compound that is used to manufacture many products, including plastics and rubber gloves. We are positive on our outlook, as we are looking for the rubber glove industry to commence its recovery in the second quarter of this year (2Q24),” Ivan predicts.
Zantat was co-founded in 1985 by Ivan’s father, Chan Hup Hooi, and partner Teh Soon Tick.
While progress in the local scene has been good for the company since its founding, Ivan says 60% of Zantat’s revenue today comes from India, with Malaysia still contributing up to 30%.
He says demand for CC products in India is strong and growing, driven by its huge population.
“The reason we are exporting our products there is because the raw CC materials in India have a high level of impurities, as opposed to say China, whose consumption of plastic per capita is at least four times that of India.”
Executive director and Ivan’s brother Chan Jee Chet, or JC as he prefers to be
called, chips in, noting that China has ample supply of suitable raw CC materials to be produced for industrial-grade usage, attracting a significant number of its local players into the industry.
Acknowledging that India will continue to be the company’s bread-and-butter market for the foreseeable future, JC says Zantat is determined to upgrade its corporate profile.
Zantat is the third-largest CC producer in Malaysia after Switzerland-headquartered Omya Malaysia Sdn Bhd and French-based
Imerys Minerals Malaysia Sdn Bhd.
The purpose for improving the group’s profile is two-fold, says Ivan.
“Firstly, we wish to dispel the negative perception that the general public usually has of a company like Zantat towards the environment, because we are involved in quarrying.
“Secondly, with the IPO, we aim to improve our brand image among Malaysians to attract talented individuals to work with us, as personnel expansion over the last four to five years has been a challenge,” he explains.
Ivan shares that Zantat is embarking on the environmental, social and governance (ESG) journey by looking into sustainable mining, how to add value to its raw materials, and how its products can reduce the overall carbon footprint of plastic goods.
He says a more environmentally friendly direction for the company could help the group manage costs more effectively.
Ivan believes that as awareness of greenhouse gas impact increases around the world, plastic manufacturers will introduce more CC into their products to reduce their carbon footprint.
This is because CC is considered to be a more sustainable material in plastic products compared with polymer, says Ivan.
With a forward-looking, sustainable and cost-effective strategy in place, Ivan and JC are confident of further improving Zantat’s profit margin, which improved to 6.2% for the nine months ended Sept 30, 2023 (9M23) from the 4.8% for the entire year of 2022. It recorded a net profit of Rm5.7mil in 9M23.
Zantat is offering 14 million shares to the Malaysian public at an IPO price of 25 sen per share, with application closing on March 13.