Alumex announces Rs 838M IPO

Alumex Limited, a subsidiary of the Hayleys Group, announced its plans to go for a Rs. 838 million Initial Public Offering (IPO), to finance the capital requirement to set up a powder coating plant and be eligible for the tax benefit offered by the Government for entities obtaining a listing on the CSE prior to March 31st, 2014.

Listing on the DiriSavi Board of the Colombo Stock Exchange, Alumex would offer 59.9 million ordinary voting shares to the public comprising of an Offer for Subscription tranche of 17.9 million shares and an Offer for Sale tranche of 42 million shares, at Rs. 14 each. The IPO will open on March 06th, 2014 and will close on March 25th, 2014 unless oversubscribed prior to the closing date. The minimum subscription has been set at 100 shares or an amount of Rs. 1,400. NDB Investment Bank is the Financial Advisors and Managers to the Offering while P W Corporate Secretarial is the Registrars to the Offering.

The Alumex Group, the premier manufacturer of aluminium extrusions since 1988 and the market leader in Sri Lanka for over a decade, is a subsidiary of Hayleys PLC, a diversified multinational Group with multifaceted manufacturing operations and capabilities with products marketed in over 80 countries across the globe. The company's focus on continuous improvement, ongoing infrastructure development and the growth in the retail sector has established Alumex as a dominant player in the Sri Lankan aluminium industry. The company has also entered into licensing agreements with globally renowned proprietary system manufacturers of aluminium extrusions and accessories to manufacture high-end aluminium products.

Speaking at the press conference to announce the IPO, Rohan Peris, the Managing Director of Alumex Limited said, "Alumex is well positioned to achieve a tremendous growth with the countless development activities in the pipeline for Sri Lanka and the substantial growth in the construction sector. Whilst financing the capital requirement to set up a new powder coating plant to meet the increasing demand for powder coated profiles is one of the key objectives of this IPO, we will also be eligible for the tax benefit offered by the Government for entities obtaining a listing on the CSE."

Darshan Perera, the Chief Executive Officer of NDB Investment Bank, expressing his confidence about the Alumex IPO said, "The Alumex IPO offers an exceptional investment opportunity for potential investors to join hands with the market leader in aluminium extrusions in the country. We are confident that the IPO will be successful despite the challenging market conditions under which it is opening."

Alumex has experienced a significant increase in demand for its powder coated profiles in the recent past and at present operates at almost 100% of its existing powder coating capacity. The company plans to acquire and operate a new powder coating plant within the first quarter of financial year 2014/2015, which would double the company's existing powder coating capacity of 1800MT per annum to cater to the said increased demand. Further, it also plans to invest in die manufacturing equipments to cater to the excess demand arising from powder coated profiles. Subsequent to the completion of the new powder coating plant, it is expected that the company's revenue from the powder coating segment would increase gradually over the years and thereby have a positive impact on the profitability of the company.

Alumex's manufacturing operation is comprised of facilities for melting and casting, die manufacturing, extruding and surface coating profiles for industrial and architectural segments. Over the years, Alumex has developed its processes to cater to the demands of the architectural industry by improving its quality and capacity. The company also manufactures the entire range of products required from mill finished, anodized, powder coated to wood effect profiles. Alumex received certification from International Aluminium proprietary system manufacturers, AluK of Italy and Fletcher Aluminium of New Zealand, to manufacture their profiles under licence in Sri Lanka. Alumex is an ISO 9001:2008 certified company and is the only approved applicator for JOTUN and DGL International powders on aluminium profiles in Sri Lanka.

The growth in the Sri Lankan construction sector, the trend towards aluminium profiles and the Government support for local aluminium extrusion manufacturers indicate an optimistic future for the aluminium industry. With over 25 years of experience in the industry, qualified management team and the strong foundation set by its parent company, Alumex is poised to create immense value to shareholders.
Ceylon Today

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