Mestron bags RM10m contract from Singapore steel pole maker

• "We believe this is a great opportunity to expand our client base and tap into the rising demand for our products beyond Malaysia."

KUALA LUMPUR (Dec 5): Specialty pole maker Mestron Holdings Bhd has secured an order of S$3.2 million (RM10.3 million) from Tamaco Pole Manufacturing Pte Ltd, marking its biggest order this year from a single client.

The purchase order (PO) of S$3.2 million is equivalent to about 22% of the group's revenue for the financial year ended Dec 31, 2021 (FY2021) and raises Mestron's total order book size to RM63 million.

In a statement on Monday (Dec 5), Mestron managing director Por Teong Eng said the PO has provided an opportunity to diversify the group's earnings base and reduce the reliance on its home market, Malaysia.

Por noted Mestron is confident that an established relationship with the Singapore-based company will create a long-term relationship that will add value to the group given Tamaco Pole's strong track record.

Tamaco Pole is involved in the supply of lighting steel pole-related business and consultancy advisory services with over 40 years of experience in the industry.

"We believe this is a great opportunity to expand our client base and tap into the rising demand for our products beyond Malaysia," he said.

Based on the group's annual report for FY2021, approximately 93% of Mestron's revenue was generated from Malaysia, while less than 2% came from Singapore.

According to Por, the latest PO may potentially lead to bigger orders from Tamaco Pole, or new contracts from other industry players in Singapore.

"We are looking forward to fulfilling the orders from Tamaco Pole. The full delivery will be completed by the end of next year, which will help support our revenue growth in the near term.

"With this purchase order, we will establish our network and presence in Singapore, allowing us to tap into the opportunities in Singapore," said Por, highlighting the potential of a long-term relationship with Tamaco Pole.

In terms of the delivery of the products, Mestron will progressively deliver and ship the products to a location that both Mestron and Tamaco Pole mutually agree on.

According to the filing with Bursa Malaysia, the delivery will be done upon the receipt of the delivery memo from time to time, subject to full delivery by the end of 2023.