Coraza to invest RM50mil in new plant - MIDA | Malaysian Investment Development Authority
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Coraza to invest RM50mil in new plant

Coraza to invest RM50mil in new plant

03 Jan 2022

Coraza Integrated Technology Bhd, scheduled to be listed on the Ace Market on Jan 20, aims to invest approximately RM50mil to transform the group into an integrated engineering solutions provider by 2023.

Group executive chairman Tony Ng Fook San told StarBiz that the amount would be used to build a new plant in Nibong Tebal, Penang, equipped with the ability to manufacture interior components for semiconductor equipment and provide electro-mechanical assembly services.

The new factory, to be built next to its present facility, will have a built-up area of approximately 91,110 square feet.

The construction, targeted for completion in December 2023, will be carried out in three phases.

“Currently, our focus is on making enclosures for front and back-end semiconductor equipment. Our precision engineering interior component business contributes about 12% to 15% of the group’s revenue,” Ng said.

“Once the new plant operates, we expect the contribution to exceed over 15%.

“The contribution from the electro-mechanical assembly segment is also small currently, but it has the potential to grow in the future,” he added.

He said, “Our goal is to become an integrated engineering solutions provider by 2023.”

Ng added that the group’s prospects looked promising.

Semiconductor sales globally were expected to rise 24% year-on-year to US$48.8bil (RM203.82bil) in October 2021, according to the US-based Semiconductor Industry Association (SIA).

“In 2022, the global semiconductor market is expected to grow moderately at 8.8% to reach US$601.5bil (RM2.51 trillion) in annual sales,” he said.

“The global instrumentation industry is projected to grow to US$30bil (RM125.29bil) in 2025 from US$6bil (RM25.05bil) in 2021.

“Coraza is well positioned to tap into the semiconductor and instrumentation market growth,” he said.

Ng added that within the country, Malaysia’s engineering supporting industry has been projected by analysts to grow at a compounded annual growth rate (CAGR) of 10.3% from RM7.2bil in 2021 to RM10.2bil in 2025.

Meanwhile, Coraza managing director Lim Teik Hoe said the company had received substantial continuous incremental orders for metal fabricated parts from its major customers.

This is particularly so for precision-machined components used in the semiconductor industry.

“Despite the movement control order restrictions in 2020, our revenue for the financial year ended Dec 31, 2020 (FY20) grew 42.8% to RM83.7mil from RM58.6mil a year ago.

“The new machinery will further increase our capacity by approximately 25% and improve our service offerings to meet the increasing demand from customers operating in the booming semiconductor industry.

“These additional machinery will enable us to expand our fabrication as well as machining services to produce more complex parts and improve our production capacity, efficiency and quality,” he added

Coraza expects to raise RM33mil from its initial public offering.

Of the proceeds, RM15.5mil or 47% will be used to purchase new machinery over the next three years for its existing and new factory in Nibong Tebal.

A further RM6.4mil or 19.5% of the proceeds will be used to part-finance the construction of a new factory.

Coraza manufactures sheet metal and precision engineering components and provides design and development and sub-module assembly services to customers in semiconductors, instrumentation, life science, medical devices, and aerospace.

Source: The Star