Kuala Lumpur – Chemical Company of Malaysia Berhad (CCM) has allocated approximately RM350 million to cater for the expansion of its Pharmaceuticals, Fertilizers and Chemicals businesses.

The Group plans to spend approximately RM135 million on its Pharmaceuticals Division. To date, RM50 million has been invested to expand its pharmaceutical manufacturing facility in Bangi which is now operational. The expansion doubles the plant’s capacity to churn out one billion tablets annually.

CCM has also invested RM10 million in a hi-tech R&D centre in Glenmarie to enhance its research and development capabilities. The R&D centre will facilitate the development of new and innovative products for the Pharmaceuticals Division. The facility also houses a dedicated cephalosporin manufacturing plant for the Group.

Speaking at CCM’s 46th Annual General Meeting, CCM Berhad chairman Tan Sri Abdul Rahman Omar said the Group will also allocate RM75 million to expand its pharmaceutical manufacturing and warehousing facilities in Klang. Currently, RM3.7 million has been spent to purchase the land adjacent to the present manufacturing facility. The investment will also cater for the expansion of production capacity, purchase of new machineries, upgrading of amenities and the waste water treatment facility. Once operational in 2009, the facility will have double its current production capacity of more than 1.5 billion tablets, capsules and ampoules for small volume injectables as well as more than one million litres of liquids for the treatment of hemodialysis.

“Our main focus will be on expanding existing manufacturing facilities to boost production capacity to meet demands for our products and increase exports to over 26 countries, especially in the ASEAN markets where CCM has a strong presence following extensive regional growth through the opening of offices in Singapore, Indonesia, Vietnam, Thailand and the Philippines. We have also penetrated new markets in the Middle East and Africa and are exploring opportunities in the Central Europe, Central Asia and the South Pacific.

Tan Sri Abdul Rahman expressed the Group’s optimism of future prospects following greater public awareness of healthcare issues and the growing demand for products that promote better health.

Meanwhile, Tan Sri Abdul Rahman said the nation’s focus on developing the agriculture sector was expected to keep contributions from the Fertilizers Division strong.  “We anticipate demand and prices for products from our Fertilizers Division, which contributes about 50 per cent to the Group’s turnover to remain strong,” he added.

Manufacturing capacity will also increase by 50 per cent when CCM’s fertilizer plant in Bintulu, Sarawak is fully operational by the second half of the year. Two similar plants based in Medan, Indonesia and in Lahad Datu, Sabah will follow in 2009 and 2010 respectively.

“We are investing some RM150 million in the three plants and each is capable of manufacturing 130,000 tonnes of fertilizers annually. We are confident that the three plants together with the current facility will continue to contribute significantly to the Group’s revenue and profit performance in the future,” added Tan Sri Abdul Rahman.

CCM will also spend RM25 million to convert its existing fertilizer plant in Shah Alam into one with a safer and lower cost urea-based steam granulation process technology from the current ammonium nitrate-based process. The conversion is planned for the last quarter of 2008 and CCM expects to reduce its plant maintenance and servicing costs and to eliminate the logistics and handling costs of liquid ammonia.

Tan Sri Abdul Rahman said the Chemicals Division was accelerating its presence in the industry through recent acquisitions to further increase its revenue and profit base.

Early this year, CCM acquired 97 per cent equity of Enersave Water Sdn Bhd for RM38.3 million to strengthen its presence in the watercare business. The acquisition will expand CCM’s offerings of watercare solutions to include physical water treatment technology in the clean water and waste water sectors.

The Group also entered into a conditional Shares Sale Agreement to acquire a 94 per cent stake in polymer coating solutions specialist, Innovative Group of Companies from Paramount Discovery Sdn Bhd for RM126.9 million. It will boost the reputation of CCM’s Rubber Chemical Business as a well-known supplier of specialty chemicals to manufacturers of powder-free rubber gloves, which are in high demand and will subsequently enable CCM to aggressively grow its presence in the country’s rubber and latex industry.

For the financial year ended December 31, 2007, CCM achieved a 26 per cent increase in turnover to RM1.4 billion from RM1.1 billion last year. Overall profit before taxation was RM105.6 million for 2007 compared to RM138.4 million in the previous year. Profit before taxation in 2006 included an exceptional gain on sale of investments of RM62.1 million.

Meanwhile, CCM recorded a 40.2 per cent increase in turnover to RM399.5 million for the first quarter of its financial year ending March 31, 2008 from RM285.0 million in the same period last year. The Group also achieved a 51.5 per cent growth in PBT in the same quarter to RM30.1 million from RM19.9 million in the corresponding period in 2007.

The Board of Directors has recommended a final dividend of 10.0 sen per ordinary share less tax at 26 per cent in respect of FY07 compared to 9.0 sen per ordinary share less tax at 27 per cent and a special dividend of 6.0 sen per ordinary share, tax exempt in 2006.

CCM is listed on the main board of Bursa Malaysia with a market capitalisation of RM1 billion and is a key player in the fertilizers, chemicals and pharmaceuticals industries.

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Issued with the compliments of Chemical Company of Malaysia Berhad
Through Eric Pringle Associates Public Relations Sdn Bhd.
For further information, please contact Ida Fazila Ismail
at 03-2161 7144/49/54 or e-mail at ifazila@epapr.com.my