CCMB invests RM90 million to fuel doubledigit growth

Chemical Company of Malaysia Bhd (CCMB) is investing almost RM90 million to boost capacity following the demerger of its listed pharmaceutical entity to fuel the growth of its chemicals and polymers businesses, both of which enjoy pent-up demand.

Newly appointed Group managing director Nik Fazila Nik Mohamed Shihabuddin said the new capital expenditure (capex) following the demerger was reflective of the group’s capacity to fully subscribe available capital to fuel its growth ambitions of achieving sustainable double-digit growth and profits.

Currently, CCMB’s chemicals and polymers businesses enjoy robust growth with pre-tax margins of over 10 per cent from the current revenue of RM350 million.

Nik Fazila said there was a sizeable gap between demand and supply of chlor-alkali products.

In the polymers business, the epicycle in the gloves industry, CCMB’s leading edge polymer solutions provided the group with a strong and compelling platform to invest and seize the advantages of fulfilling its customers’ needs ahead of the competition.

“Our chemicals and polymers businesses have direct exposure to the rubber glove manufacturing process. Both segments are set to grow in tandem with the capacity expansion of the rubber gloves players,” said Nik Fazila.

Last year, CCMB announced two major corporate proposals which called for the demerger of CCM Duopharma Biotech Bhd (CCMD) from the group via a distribution of its entire equity interest in CCMD to its shareholders.

The proposals involved a degearing exercise relating to the proposed sale of its three parcels of land in Shah Alam, a proposed private placement of up to 10 per cent of the issued share capital in CCM Bhd and the identification of other non-core assets to be divested.

The initiatives were a continuation of the company’s strategic review, which commenced in 2015, to house all of its pharmaceuticals businesses under the CCMD umbrella, to exit from non-performing business segments and strengthen its balance sheet.