CCM sees robust growth next year

Chemical firm expects revenue to be 10% and 20% up in 2018 and 2019

KUALA LUMPUR: Chemical Company of Malaysia Bhd (CCM) is expecting between a 10% and 20% rise in its revenue for 2018 and 2019, respectively, based on the pent-up demand for its products, says group managing director Nik Fazila Shihabuddin.

She also expects CCM to secure supplies for chemicals for Petronas’ Refinery and Petrochemical Integrated Development (Rapid) project when it comes onstream, further boosting its earnings in the coming years.

“Next year we will see real growth, as this year, we are still focusing on the degearing exercise,” Nik told StarBiz in an interview recently.

She added that the company plans to double its profits over the next three years.

For the 2017 full year, CCM reported a net profit of RM26.34mil on the back of RM370.7mil in revenue.

About 77% of its revenue was from the chemical business, while the remaining 23% came from the polymer, Nik added.

CCM is involved in the business of chemical products and applications, and polymer coatings and applications. It supplies liquid chlorine(and caustic soda) and polymers to the market place and has plants inPasir Gudang and Bangi.

The company is also investing RM68.5mil to reactivate its chlor-alkali plant in Pasir Gudang so that “it can deliver additional production capacity, which will allow its chemical business to capture the available market opportunity currently supplied by importers,” Nik noted.

She believes that there is a “sizeable gap between demand and supply of chlor-alkali products”. It also supplies polymer coatings for theglove industry.

Given the gap, CCM is most keen to seize the opportunities.

Nik pointed out that “we are expanding our existing facilities and also looking to work with partners so that we can offer more to themarket. We believe we are aptly placed in the growth trajectory of thecountry.”

Nik was the chief financial officer of the CCM group for six years before being appointed to the current top post late last year.

Apart from capacity expansion for its existing plants, CCM is also in a position to buy up plants. “However, there are too few (of them) around,” she added.

She said the company’s shareholders were supportive of its growth plans. CCM is 56% owned by Permodalan Nasional Bhd.

Nik said the expansion of the Pasir Gudang plant is slated for completion in the second quarter of 2019, while its Bangi plant willbe for the production of polymers.

The plant capacity at Pasir Gudang is 40,000 tonnes per year and an additional 20,000 tonnes per year capacity will be installed via the expansion.

“This expansion is at a lower capital expenditure cost as opposed to starting a green-field site, as most of the required infrastructure is already in place,” she added.

Of the current 40,000 tonnes per year capacity, about 24,000 tonnes per year of products are sold as liquid chlorine, while the rest is converted into other basic chemicals such as hydrochloric acid and sodium hypochlorite.

These products are sold in the domestic market.

Nik said with 24,000 tonnes per year, CCM market share of liquid chlorine is 40%, while the remaining is held by its competitors.

The market size for liquid chlorine in the country is 60,000 tonnes per year , but with the emergence of Petronas’ Rapid project, the demand for caustic soda is expected to rise to 220,000 tonnes.

“This is why we want to expand and team up with partners to be able toimport and supply to the market place,” added Nik.