Steeled for the future

FOR the past few years, Unitrade Industries Bhd has faced market uncertainties with weaker steel prices, as well as impairments on receivables and inventory.

But all that is behind the company now.

The supplier and distributor of construction materials says it has experienced a turnaround and is now entering a new phase of sustainable and scalable growth.

During the headwind period, the company streamlined its wholesale distribution product mix, strengthened foothold in metal recycling, and expanded into the wholesale distribution of solar products, which forms its renewable energy (RE) segment, says group managing director (MD) Nomis Sim Siang Leng.

“These initiatives have started to deliver results,” he tells StarBiz 7.

“In the first quarter ended June 30 (1Q26) we recorded a profit after tax and non-controlling interests of RM6.4mil, a turnaround from a loss of RM6mil in 4Q25.”

The improvement was driven by a 52% quarterly increase in gross profit with gross profit margin improving from 5.2% to 8.1%, reflecting a shift toward higher-margin products.

Sim says following the strategic realignment of the group’s revenue mix, nearly 50% of total revenue now comes from green businesses comprising metal recycling and RE.

“This milestone underscores how far Unitrade has evolved from a traditional distributor into an integrated player with synergistic upstream growth verticals.

“We believe the turnaround is not a one-off recovery, but the result of disciplined execution, stronger fundamentals, and growing earnings contribution from our green businesses.

“With a more profit-driven strategy and a realigned revenue mix, we are building a clearer path towards sustainable growth,” Sim says.

Shareholders, he says, can now look forward to improved financial performance going forward.

Wholesale distribution, however, remains Unitrade’s bread and butter business.

Metal recycling – key growth driver

“After strategically reducing exposure to large-volume, low-margin products, we are now prioritising higher-margin product categories such as pipes, valves, fittings and solar products.

“This will allow us to have better control over inventory management, ensuring a more efficient and profitable distribution model.”

Meanwhile, the company’s metal recycling business continues to be a key growth driver.

Following its recent expansion into Sabah and Sarawak in April, it now has 15 recycling yards, making it one of Malaysia’s largest metal recyclers.

Building on this scale, the company which is currently valued at over RM420mil, says its next step is to further optimise collection, processing, and logistics efficiency to support the country’s transition to low-carbon steel production.

Sim says significant potential is also seen in solar distribution.

Having entered this space in 4Q24, the company recorded RM44.6mil in sales for financial year 2025 (FY25) – a strong first-year performance.

It plans to scale this division further by partnering with solar engineering, procurement, construction, and commissionin contractors to supply solar products and components once projects are secured, thereby tapping into Malaysia’s expanding RE ecosystem.

“We have also been enhancing our supporting businesses, including the manufacturing of pre-insulated pipes and the rental of modular housing and temporary structural support equipment divisions.

“We have also established a new pipe fabrication centre with powder coating line in March and expanded our rental equipment fleet, including crawler cranes, scissors lifts, and skylifts to support growing infrastructure and construction demand.”

In terms of mergers and acquisitions (M&A), the company’s subsidiary recently bought an equity interest in Kien San Metal Sdn Bhd for RM42mil.

Sim says that at this stage, the immediate focus is on integrating Kien San effectively to unlock operational and cost synergies across its recycling network.

“We are also strengthening our balance sheet to enhance our financial flexibility as we grow.

“Any future expansion, whether organic or through M&A will be executed prudently.”

Fluctuating steel price

Like many in the industry, the company continues to navigate fluctuating steel prices, which affect procurement costs and pricing visibility.

“These are structural realities of the trading and distribution business.

“To mitigate these, we have adopted a more strategic approach to product and inventory management,” says Sim.

By reducing the group’s exposure to high-volume, low-margin products, it is less affected by price volatility and better able to preserve margins even when steel prices soften.

“At the same time, we have strengthened our receivables collection processes and tightened credit control measures to improve cash conversion.”

Sim points out that the the new Steel Industry Roadmap 2035 or SIR2035 bodes well for the company’s future.

“The launch of the SIR2035 could not have come at a more opportune time for us.

When we decided to expand upstream into metal recycling in January 2024 through our acquisition of a 51% equity interest in Intergreen Metals Sdn Bhd, our goal was clear – to position Unitrade as a more sustainable and integrated player within the steel value chain.

“Given that a large portion of our wholesale distribution business involves steel-based products, this move is highly synergistic and strategically aligned with where the industry is heading.”

Sim calls Unitrade a direct enabler of green steel production.

“Through this business, we collect, segregate and process metal waste into recycled feedstock that serves as the primary input for steel manufacturers.”

In FY25 alone, the company recycled over 430,000 tonnes of ferrous and non-ferrous metals which are the key raw materials for producing green steel via electric arc furnaces and induction furnaces.

“By repurposing metal waste into usable feedstock, Unitrade directly contributes to low-carbon steel production, reduces waste at scale, and reinforces our role in advancing the circular economy.”

Sim notes that steel making is highly carbon-intensive, emitting an average of 1.85 tonnes of carbon dioxide per tonne of crude steel produced.

Furthermore, the SIR2035 highlights the urgency of transition, introducing policy measures such as carbon pricing, emissions transparency, and the promotion of low-emission steel.