Flo-Tek ponders BSE listing

Isaac Pinielo | Friday June 12, 2015 14:31

Promoters of the company believe that the move to list on the bourse will be the company’s way to increase local ownership.

Flo-Tek chief executive officer Vijay Naik told BusinessWeek in an interview that the BSE listing would be the company’s first move to become a public entity.

Going public and offering stock in an initial public offering is expected to be a major milestone for the company as it will help the manufacturer to be in a position to obtain financing outside of the banking system or reducing debt.

“This will reduce the overall cost of capital and give the company a more solid standing when negotiating with banks. This would reduce interest costs on existing debt the company might have. We hope to list in the next five years,” explained Naik.

Flo-Tek’s core business is the manufacturing and distribution of high-density polyethylene pipe (HDPE), unplasticised polyvinyl chloride (PVC-U), modified PVC (PVC-M) and sewer pipes and roto-moulded products. The company also supplies pipes for the manufacturing of borehole casings and screens.

Being one of the largest manufacturers in the country, Naik said Flo-Tek is an export-based industry employing about 400 citizens.

Furthermore, the CEO said the company’s factories in Lobatse and Johannesburg are fully equipped to enable Flo-Tek to manufacture their pipes and tanks as well as to distribute them throughout South Africa, Botswana and other SADC countries.

“We have established subsidiary companies in Dundee, Port Elizabeth and Angola, which allow us to be able to supply our products without the delay of long delivery times,” said Naik. Flo-Tek prides itself on ensuring the best quality products and the highest delivery standards. The CEO said the company’s pipes could last a lifetime. He however expressed discontentment that although the company has fully automatic plants, there are no experienced personnel available.

“We failed to do product development and if we ask our machinery suppliers to send experts for training, then we can’t claim from BOTA (now Botswana Qualifications Authority),” he said.