ACE Market-listed Minox unfazed by SST hike

KUALA LUMPUR: Newly-listed Minox International Group Bhd is unperturbed over the government’s move to increase the sales and service tax (SST) from 6% to 8% next year as this is unlikely to affect its sales and margins.

Minox managing director Cheong Chee Son said it will be able to pass on the costs to its customers, which are mainly in the food and beverage (F&B), pharmaceuticals and semiconductor industry.

However, he added that the company will not be increasing its prices of its products which include sanitary valves, tubes and fittings as well as installation equipment and its components, anytime soon.

“Most of the time, we have standard pricing for our customers over a set period of time, like six months or longer. So we do not intend to increase anything for the time being,” he told reporters after the company’s listing on the ACE Market of Bursa Malaysia yesterday. According to Cheong, the company will be able to pass on the costs eventually because the entire costs of projects are much bigger than the product costs.

“Our customers understand that, so as long as we’re willing to make them what they need and provide the servicing they require, there won’t be an issue,” he said.

Cheong also added that a review on pricing is conducted annually, as management determines if there should be an increase due to factors like the exchange rate or raw materials costs.

The stainless steel distributor caters to the local and overseas markets with large inventories through its regional offices located in Malaysia, Indonesia, Singapore and Thailand.

In the financial year ended Dec 31, 2022 (FY22), the F&B segment is the largest contributor towards its revenue at 88.8%, followed by semiconductor (6.7%) and pharmaceutical (4.5%). Cheong said F&B was a matured market, and the time had come for them to look at growing the other two segments.“Semiconductor is a good area to be in and we have the expertise for it and we see plenty of room to grow,” he added.

As part of its expansion plans, Cheong said Minox has started the construction of a new warehouse in Puchong which is expected to be completed by the second quarter of 2025.

“We are also looking at different locations at the moment for a new warehouse in Singapore. We expect it to be completed by the third quarter of next year,” he said.

Cheong explained the new warehouse in Singapore will be dedicated to store new vacuum fittings and valves for the semiconductor industry as well as inventories that cater to customers in Singapore and abroad.