Managing director Piong Teck Onn said after studying both the Kuala Lumpur Stock Exchange (KLSE) and Mesdaq, it was found that Mesdaq fits the company's profile better in the long run.
"The manufacture of pharmaceutical products very much depends on the technology know-how; the activity of pharmaceutical research, particularly, involves a lot of technology," he said after the company's shares balloting ceremony here Friday.
Kotra, scheduled for listing on Oct 27, would be the third company to be listed on Mesdaq. The technology-based exchange commenced trading on Apr 30, 1999 with only one counter, Supercomal Technologies Bhd, followed by Intelligent Edge Technologies Bhd which joined the exchange on Aug 2 this year.
Kotra made available 10,200,000 new ordinary shares of RM0.50 each at an issue price of RM0.875 per ordinary share for subscription by way of private placement and public offer.
A total of 550 applications for 2,408,600 shares were received for a total of 1,000,000 shares available for subscription by way of public offer which represents an oversubscription of 1.41 times.
Piong said that gross proceeds from the new issue, amounting to RM8,925,000 will be utilised as working capital and repayment of borrowings, apart from listing expenses.
"This will help us fund research and development (R&D) activities, drive export and implement automation at our facility," he said.
Kotra, through its wholly-owned subsidiary Kotra Pharma (M) Sdn Bhd (KPM), manufactures both prescribed and over-the-counter drug products, carving its own market niche in children's health supplements via its own brandname "Appeton."
Over-the-counter products, which are drugs readily available to the public, contributed some 82 percent to the company's revenue for the financial year ended June 30, 2000.
The company currently exports its products to Singapore, Hong Kong, Vietnam, Brunei, Mauritius and Myanmar and is looking at other Asian markets including Sri Lanka, Cambodia and the Middle East.
Piong said that the Asean Free Trade Area (AFTA), to be implemented in 2003, will present the local pharmaceutical industry a better access to potential export markets within Asean like Thailand and the Philippines.
"Unlike these countries, both Malaysia and Singapore have implemented the free importation policy on pharmaceutical products which enabled local companies to compete openly with multinationals.
"With AFTA, these countries will have to open up their markets and give us the opportunity to penetrate their markets," Piong said.
Kotra registered a RM8.03 million pre-tax profit for the financial year ended June 30, 2000, on the back of a RM26.82 million turnover.
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