Kuala Lumpur - Chemical Company of Malaysia Berhad (CCM) is confident of a stronger performance in 2010 based on the on-going improvement of the domestic and regional economic environment.

The Group''s overall performance for its financial year ending December 31, 2009 was impacted by continuing damp economic conditions particularly in the first half and also some one-off write- offs resulting in a 27.4 per cent drop in revenue to RM1.6 billion from RM2.2 billion achieved in the corresponding period in 2008. Profit before tax (PBT) for the year under review was RM15.6 million, 87.0 per cent lower from RM120.3 million.

Speaking at a media briefing after the CCM Berhad''s 48th Annual General Meeting, Group Managing Director, Dato'' Dr Mohd Hashim Tajudin said the continued improvement of the business environment and implementation of various strategic initiatives including development of higher value innovative products, stepping up of productivity and efficiency and expanded presence in select market segments in its pharmaceutical, fertilizers and chemicals divisions respectively would boost the Group''s performance in 2010.

Meanwhile, the Pharmaceuticals Division recorded a 4.3 per cent growth in revenue to RM242.7 million from RM232.7 million for the period under review in 2008 while results from operating activities recorded a profit of RM45.6 million, 22.9 per cent lower from the RM59.1 recorded in 2008. Higher government sales contributed to the increase in revenue whilst the drop in profits was attributable to full year depreciation and operating cost impact of the new capacity expansion in its Bangi operations.

Dato'' Dr Hashim said that the full year impact of the Bangi expansion in 2008 combined with lower margin sales to public health institutions contributed to a decline in the Division''s results from operating activities.

"We will step up efforts to venture into niche segments while developing a broader portfolio of innovative and higher value added products to drive the Division''s performance and contribution.

"The Division would also implement measures to enhance market share of the local generic market from the current 20 per cent to 23 per cent by increasing sales of existing products whilst launching new products," he added. CCM''s Chemicals Division recorded a 28.8 per cent fall in revenue to RM432.0 million from RM606.5 million in the corresponding period in 2008. An extraordinary charge, contributed to a loss of RM12.7 million in the results of operating activities compared to a profit of RM14 million in the same period last year. Without the impairment, the Division would have recorded a profit of RM4.8 million. The Division''s turnover declined due to an overall contraction in sales volume and selling price of products. A stronger performance is projected based on improvement in demand and prices recorded in the first quarter of 2010. Initiatives to expand CCM''s presence in select market segments and focus on extending homegrown formulations, introduction of new products and stepping up of branding activities are also expected to yield better performance.

Lower prices exacerbated by softer customer demand for fertilizers saw the Division''s revenue contract by 36.2 per cent from RM1.4 billion in 2008 to RM897.3 million last year while profits from operating activities dropped to RM28.6 million in 2009 compared to RM94.9 million registered in the corresponding period in the previous year.

"Despite a decline in the fertilizers business last year, the Division''s prospect looks positive as the stronger current price of crude palm oil will contribute to an increase in the demand for fertilizers. We will step up productivity and efficiency of our invested assets and also source for competitive and reliable raw material supplies," said Dato'' Dr Hashim.

CCM''s new plant in Lahad Datu, Sabah scheduled to come on stream in the first quarter 2011 will enhance the Group''s position as the largest compound fertilizer manufacturer in Malaysia and extend its supply capability in Sabah and East Kalimantan. The commissioning of the RM60 million plant will raise the Division''s output to 670,000 tonnes annually

"We are constantly pursuing new avenues to further develop our business overseas including identifying strategic local partners and exploring venture opportunities in the regional markets. This will inevitably give us the competitive edge and cement our position as a major player in the ASEAN region," Dato Dr Hashim added.

The CCM Board of Directors has recommended a dividend of 8.0 sen tax exempt dividend (2008: Final dividend of 1.8 sen per ordinary shares less tax at 25 per cent and 4.85 sen tax exempt dividend) in respect of the current financial year ending December 31, 2009.

CCM, Malaysia''s largest generic pharmaceutical and compound fertilizers manufacturer, is listed on the main board of Bursa Malaysia 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
TBy Eric Pringle Associates Public Relations Sdn Bhd.
For further information, please contact Ida Fazila Ismail
at Tel no: 21617144 or email: ifazila@epapr.com.my