Strengths

We believe our competitive strengths to be as follows :-

(a) Manufacturing capability and ability to custom manufacture to the specific requirements of customers

We believe that we are the only stockist in Singapore with a manufacturing arm which gives us the necessary first mover advantage in terms of stock availability and shorter delivery lead time. We are also able to customise steel products according to the specifications of our customers which gives us a competitive edge over our competitors in terms of addressing and fulfilling all the requirements of our customers. As a result, we are a "one-stop supermarket" offering convenience to our customers as we are able to satisfy their requirements without having to deal with other stockists or manufacturers.

(b) Wide range of products

We are able to provide a one-stop service for our customers by carrying an extensive range of steel products, including customised steel products. In total, we carry more than 2,000 different steel products comprising steel plates, angle bars, flat bars, channel bars, round bars, hollow sections, beams and pipes, all of different dimensions.

(c) Established and diversified customer base

Having been in the steel trading business for more than 30 years, we have established a pool of more than 300 customers in Singapore and various countries in South East Asia. Accordingly, we have a very diversified customer base and are not dependent on any single customer. Over the years, we have also fostered good working relationships with our customers, which include public listed companies such as Hong Leong Asia Ltd. We market our new products and manufacturing capabilities to our existing customers and expand our customer base through referrals.

(d) Reliable and established suppliers

We source our steel and related materials from several established steel mills or their representatives or agents around the world. These include steel mills in Turkey, Russia, Ukraine and other Eastern European countries. We have established trusting and reliable relationships with our suppliers through our more than 30 years of being in the steel trading business. In addition, our experience in the steel trade enables us to be familiar with the quality of steel products produced by the different steel mills. With a diversified supplier base, we are also able to source for high quality but yet competitively priced supply of steel products and materials.

(e) Experienced management team

Our management team comprises persons who have many years of experience in the steel industry. The members of our management team include our Executive Chairman Mr Tan Chan Too , our Chief Executive Officer Mr Wee Piew and our Directors Messrs Tan Ah Bee, Tian Chye Heng and Lee Leng Loke. Messrs Tan Chan Too, Tan Ah Bee, Tian Chye Heng and Lee Leng Loke each has more than 20 years of experience in the steel industry. Our manufacturing operations are overseen by Mr Kiat Yap Chuan, our production manager who has been involved in the manufacturing operations for more than 30 years.

Collectively, our management has contributed greatly to the growth of our business in the past years and will continue to do so in future years.

Barriers to entry

We believe that there is a high barrier to entry in our line of business. Firstly, a potential stockist will require a large warehouse and warehouse facilities to house its steel stock. This requires a large initial capital outlay. In addition, a large working capital is also required to hold a wide range of stock. We estimate that approximately $20 million is required to acquire and stock the wide range of products we presently carry in our warehouse.

In addition, trading in steel products yields relatively low profit margins, and therefore a stockist must rely on high volume turnover in order to sustain its business. We are of the view that it is difficult for new entrants to our trading business to secure enough sales volume to sustain their business in the initial period of operation.

Lastly, we also believe that experience and a strong understanding of the industry is required in order to be able to successfully compete in our industry. Our Company has been in the business for more than 30 years and has accumulated a vast amount of experience and goodwill among its suppliers and customers. As such, our Company has a reputation which we can leverage upon when negotiating transactions with our suppliers and customers.