According to Nico Steel, it has been supplying raw materials to this customer for years but had thus far not been accorded the status of a listed vendor.
With the signing of the agreement, Nico Steel can now be formally listed as a vendor of this customer.
Nico Steel believes that with this agreement, its business strategy has been “validated”.
According to Nico Steel, it is the only company in China that can provide aluminum, stainless steel and copper alloy materials with recycled content ranging from at least 80% to 95%.
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Nico Steel says the use of its materials, can help its customers meet the European Union Metals Ecosystem Directive and reduce carbon footprint in their product life cycle assessment.
Nico Steel shares has been suspended since Nov 2020.
Back in October 2020, Nico Steel was told by SGX to delist, after the company, which has been on the watchlist since 2016, was unable to meet the minimum market value and earnings record required.
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The company’s controlling shareholder, executive chairman and president Danny Tan was told to come up with an exit offer for the other shareholders.
Thus far, Tan has yet to table an offer.
Evidently, Nico Steel has turned profitable since then.
On Oct 13 2022, Nico Steel reported that revenue was down 9% y-o-y to US$9.1 million for 1HFY2023 ended Aug 31 2022.
However, the company was able to sell more of its higher margin alloy, which helped it record earnings of US$220,000, versus US$159,000 recorded in the year earlier. In addition, favourable forex helped as well, the company notes.
