Glue maker makes successful debut at PSE

Federal Chemicals Inc., a local glue manufacturer, debuted to a warm reception at the Philippine Stock Exchange (PSE) yesterday as its stock closed slightly higher from its initial public offering (IPO) price.

The adhesive and sealant maker opened at a high of P7.40 per share in intra-day trading and only went as low as its IPO price of P7 each. At the end of the session, FedChem closed 10 centavos higher at P7.10.

FedChem was only the third issue to be listed at the PSE this year, following the IPOs of information technology firm SQL*Wizard and property developer Primex Corp., both of which also gained on their first trading day.

FedChem listed a total of 37.508 million common shares out of its authorized capital stock of 100 million shares, with a par value of P1. Its IPO, meanwhile, consisted of 12.508 million shares or one-third of its total outstanding stocks.

RCBC Capital Corp. was the lead underwriter and issue manager for the IPO, which netted about P82 million for the company. The proceeds will be used mainly for working capital, repayment of trust receipts and investments in interest-bearing government securities.

FedChem locally manufacturers and markets several types of adhesives and sealants used by the hardware, construction and leathergoods industries. Among its products are FedSeal Elastometric Sealand, Surebond and Bondy contact cement brands.

It is also the exclusive Philippine distributor of products from Orgavyl Chemical Industries BHd., a leading publicly-listed company based in Malaysia, offering a wide array of industrial and household do-it-yourself adhesives and sealants.

Last year, the company posted total sales of P98.6 million from P70.6 million in 1999 while net income rose from P171,000 to P411,000.