The company, founded in 1964, makes a range of foam products. Customers include Toys R Us, Ikea, Littlewoods, Land of Leather and Staples.
The market is competitive. There are 2,000 polyurethane makers in China, with around 10 to 20 as large as FoaMasters.
However, chairman Teh Kim Seng believes the company has a strong advantage because of the high quality of its products, the number of international standards they meet and the strength of its intellectual property.
FoaMasters has eight patents pending on machine technology and a further two on products. The company also has a 10-year deal to use systems developed by US group Mobius Technology to recycle scrap foam.
He says: “One of our big advantages is that we have been around more than 40 years. There is a lot of know-how in this company.
The firm employs 1,900 people across eight factories in China and Vietnam, having decided it was better to be close to customers rather than transporting bulky foam products long distances.
It made pre-tax profits of $6.6milion on revenues of $72million for the year to December 2006.
Teh admits the company had been hoping to raise more money but it was unable to in the current market conditions.
“We’ve raised enough to cover the cost of listing,” he says. “We now want to build our credibility with investors before we look for more.”
The money will be invested in taking the company into new markets, including India, Singapore and Malaysia.
It also involves new segments such as industrial, automotive and medical products. Teh believes the risk of downturn in the US next year will be offset by growth in China, where demand for consumer goods is rising sharply.
He says:”The Chinese economy has been growing at 8 to 15 percent a year since 2001 and will for the next 10 to 20 years. There are 1.4billion people there who want to improve their standard of living.”
(Source: FoaMasters Daily Express, November 2007)