Pan Merchant Bhd, a specialist in solid-liquid filtration solutions, is accelerating efforts to expand its footprint in high-growth sectors such as sustainable fuel, water treatment and mining, as it prepares for its upcoming listing on the ACE Market of Bursa Malaysia.
While the edible oil industry remains the cornerstone of the company’s business—accounting for almost 90% of total revenue in the last financial year—executive director Wong Voon Yoong said the group is increasingly prioritising sectors with larger global potential, particularly water treatment and mining.
“Water is the immediate sector that we are already putting a lot of focus into. Many projects are coming up, both locally and overseas, and the contract values are quite high,” Wong told StarBiz. The group’s filter presses are widely used in potable water and wastewater treatment applications, supporting environmental compliance and water reuse.
Pan Merchant also views mining as a major untapped opportunity, given its much larger share of the global filtration market. “If you look at edible oil, it accounts for only about 5.8% of the global filtration market. The mining sector, however, makes up roughly 22%—that’s around three and a half times larger,” Wong noted. Combined, water and mining represent approximately half of the global filtration market.
The company has prior experience in supplying filters for smaller mining applications such as clay processing, which it first entered over a decade ago. Wong emphasised that the group is already capable of supporting certain segments of the mining sector, especially where filter size requirements are moderate.
Executive director Wong Nyeon Thiat disclosed that the group currently holds a modest 0.5% share of the global filtration market, with a target to grow this to 2%–3% within the next two to three years. “Getting to 2% to 3% is very substantial and a lot of work needs to be put in,” she added.
Pan Merchant aims to raise RM67.6 million through its initial public offering (IPO) scheduled for 26 June. The listing will see the issuance of 232.19 million new ordinary shares at 27 sen each, implying a market capitalisation of RM247.32 million based on a price-earnings ratio of 32.14 times its FY2024 earnings.
Of the total IPO proceeds, RM62.7 million will go to Pan Merchant, with the balance RM4.9 million allocated to Budhi Sentoso Rachmat, a substantial shareholder who is offering 18 million shares via private placement. No other directors or shareholders are participating in the offer-for-sale portion.
The group has committed to a minimum dividend payout of 30% of its post-tax profit attributable to shareholders annually.
Approximately RM7 million of the IPO funds will be directed towards product development, including a mining-specific prototype filter, to be completed by end-2025. Other development priorities include modular filters for easier shipping, complementary equipment such as slurry thickeners and discharge systems, and in-house manufacturing of replacement parts to enhance control over design and quality.
Capital expenditure, earmarked at RM28 million, will focus on upgrading production capabilities through new machinery and plant renovations. Pan Merchant operates three manufacturing sites in Ipoh—Jelapang Plant 1, Jelapang Plant 2, and Lahat Plant—with most output exported to Asia, Europe, the Americas and Africa.
Managing director Wong Voon Ten said the company plans to enhance manufacturing efficiency by setting up a second filter leaf production line at Jelapang Plant 1 and deploying automation technologies. “These upgrades aim to improve consistency, reduce dependence on manual labour, and minimise outsourcing,” he said.
Additionally, a second filter leaf line will be introduced at its Netherlands facility, as part of a RM6 million expansion involving office and workshop upgrades. “Filter leaves are parts that our customers need to replace periodically. This creates a recurring income stream for the group,” Wong added.
Demand for filters has been steadily increasing, and the company aims to address potential delivery delays through added capacity. “It’s not that we can’t meet demand now—but delivery timelines can become too long,” Wong said.
Currently, around 80% of the company’s production processes are still manually performed. Nyeon Thiat stated the group is targeting to reduce this reliance to approximately 30%–40%, although some labour-intensive assembly processes are expected to remain.
The remaining IPO proceeds will be allocated towards working capital (RM14.69 million) and estimated listing expenses (RM7 million).
Affin Hwang Investment Bank Bhd is acting as the principal adviser, sponsor, sole underwriter, and placement agent for the IPO.
-The Star
