CI Holdings’ new plant expected to be fully operational by March 2018

KUALA LUMPUR: Edible oil producer CI Holdings Bhd expects its upcoming new plant, which will increase the group’s capacity by 22%, to be fully operational by March 2018.

According to group managing director Megat Joha Megat Abdul Rahman, the new capacity from the plant currently undergoing construction in Banting, Selangor, would enable the group to fulfil an additional 5,000 container loads of edible oil for export.

“We are currently constrained by capacity. We are already running at 100% capacity, and yet, we are still unable to fulfil the expanding orders from customers,” Megat Joha told reporters after the company’s AGM here yesterday.

Citing the need to address the capacity con- straint that the group faced, he added: “We will spend RM12.5mil in capital expenditure within this financial year to expand its production capacity.”

At present, CI Holdings operates four plants – two in Banting and another two in Pasir Gudang, Johor – through its subsidiaries. The plants have in total 31 packing lines with a combined capacity of 810,000 tonnes of edible oil per annum and 45 oil tanks with a total capacity of 4,160 tonnes.

Besides vegetable-based edible oil products, CI Holdings is also involved in the manufacturing and trading of sanitary ware products.

Megat Joha said the group would continue to look for opportunities to expand its edible oil production capacity even when the new plant becomes fully operational next year. This is because even with the new capacity, CI Holdings would still be constrained to meet the demand from its customers.

“So, we need to remain focused on growing our production capacity,” he said, adding that the group was scouting for new land on which it could build new plants.

Currently exporting 85% of its products to 95 countries worldwide, Megat Joha said CI Holdings was eyeing new markets overseas to generate growth. CI Holdings is expected to unveil its financial results for the first quarter ended Sept 30, 2017 on Nov 22.

The group’s net profit grew a marginal 1.7% to RM27.06mil for the financial year ended June 30, 2017 (FY17) from RM26.61mil in the preceding year, while its revenue grew 66.6% to RM2.18bil from RM1.31bil previously.

Its revenue growth was attributable to an increase in shipments of full container loads, higher selling prices in US dollars and the weakening of the ringgit.

Earnings, however, were affected by translation losses and low margins.

CI Holdings’ earnings per share increased to 16.70 sen in FY17 from 16.43 sen in FY16.

The group declared a dividend of eight sen per share for FY17 compared with five sen for FY16.