Mainboard-hopeful Oiltek gets slick with innovation, internationalisation

Business Times

11-05-2025

[SINGAPORE] An invention every 180 days has kept Oiltek International in the black, its order book stacked and its share price buoyant since it listed on the Catalist board three years ago.
The secret to its stellar run? Drilling down on the basics of innovation, internationalisation and diversification, said its executive director and chief executive Yong Khai Weng in an interview with The Business Times.
Elaborating on Oiltek's policy of introducing two inventions every year, Yong pointed out that this includes any new and material developments to existing designs – such as energy-saving or cost-cutting measures, improvements to product quality and other enhancements.
Improvements mostly come from two sources: market feedback and internal development, noted Yong, a chemical engineer by training.
The way he sees it, novelty is what fetches bigger growth and a larger premium. 'We continue to expand our products, knock on the doors of new clients and penetrate new countries – that has been our growth strategy for the past (few years).'
Healthy set of numbers
The vegetable and edible oil process engineering firm has been riding a wave of 'buy' calls following the release of a healthy set of numbers for the first half ended December 2024 three months ago.
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Net profit upped 57.8 per cent and revenue gained 4.4 per cent, and it posted an earnings beat alongside a higher final dividend.
With dividends reinvested, the counter generated a total return of 436.5 per cent over the past 12 months. It has a market capitalisation of about S$225 million as at May 9.
The company's order book amounts to RM402.4 million (S$121.8 million), as at Apr 16, and is expected to be fulfilled over the next 18 to 24 months.
In recent years, Oiltek and its units have consistently bagged million-dollar contracts across several markets namely Malaysia, Indonesia, South Korea, Kenya and Colombia.
The latest slew of contracts announced on Apr 16 – worth some RM61.9 million – involve the design, fabrication, delivery, testing and commissioning of dry fractionation and refinery plants and other facilities across Thailand, Indonesia, Malaysia, the Americas and Africa.
In recent years, Oiltek and its units have consistently bagged million-dollar contracts across several markets namely Malaysia, Indonesia, South Korea, Kenya and Colombia. PHOTO: OILTEK INTERNATIONAL
The challenge now, said Yong, is to sustain Oiltek's momentum.
Growth tends to slow as companies expand, yet the 45-year-old Malaysian firm has maintained its rate of growth while not significantly increasing headcount, noted the chief executive.
The company now has about 90 employees versus some 50 to 60 people from when he first joined in 2008, despite revenue and turnover snowballing, explained Yong.
Oiltek on Feb 17 applied to transfer its listing to the Singapore Exchange mainboard, noting that the move would enhance its image locally and overseas as public investors accord a premium to such listees.
'Our objective is to (achieve) better compliance, higher visibility and better market recognition,' said Yong.
The company announced on Apr 2 that the proposed transfer has been approved in-principle.
Going global
Oiltek's presence spans 36 countries across five continents, including East African nations such as Kenya, Tanzania and Uganda; Central American states like Costa Rica, Nicaragua and Honduras; as well as Latin American territories like Brazil.
'We are very aggressively expanding our business into different countries, multiplying the countries,' noted Yong.
'(Many may wonder) why we are taking a risk to go so far away but, in reality… Oiltek has been very familiar in those countries – actively participating in engineering, procurement, construction and commissioning works, and building factories,' he continued.
Oiltek's oil refinery equipment. The 45-year-old Malaysian firm has maintained its rate of growth while not significantly increasing headcount, notes the chief executive. PHOTO: OILTEK INTERNATIONAL
When asked about Oiltek's most attractive markets, Yong replied that the focus will continue to be on countries that are significant producers of feedstock and those with large populations.
He pointed out that the production of vegetable oil is still predominantly concentrated in a few countries.
For example, leading producers of palm oil include Malaysia, Indonesia and Thailand while China and the US are significant players in the soybean oil market, said Yong, who concluded that Oiltek will continue 'keeping close focus' on Malaysia and Indonesia.