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Thursday, May 25, 2017

CCM allocates up to RM130mil in capex this year

Wednesday, 24 May 2017 | MYT 9:25 PM

KUALA LUMPUR: Chemical Company of Malaysia Bhd (CCM) has allocated between RM120mil and RM130mil in capital expenditure (capex) this year, including to upgrade its pharmaceutical warehouse hubs in Klang and Bangi, Selangor.

The company allocated a capex of RM102mil last year.

Chief executive officer Leonard Ariff Abdul Shatar said the cost for the Klang warehouse and the warehouse cum office in Bangi was about about RM45mil and RM30mil, respectively.

“The hubs, to be completed this year, will have the capacity to store up to 4,000 pallets each.

“Overall, RM100mil has been allocated for the pharmaceutical business and the balance for chemicals and polymers businesses,” he told reporters after the company’s AGM on Wednesday.

For the first quarter ended March 31, 2017, CCM’s pre-tax profit rose to RM16.14mil compared with RM12.24mil in the same period a year ago.

Revenue increased to RM212.24mil from RM151.53mil, previously.

Leonard Ariff said the company was confident of driving sustainability in its business as it focused on key strategies to accelerate the growth of its core business, namely pharmaceuticals, chemicals and polymers following its exit from the fertilisers business last year.

He also said the company planned to launch its Flavettes brand made-in-Malaysia effervescent vitamin C and multivitamin product in the third quarter of 2017.

“We have run our first validation batch and need to run two more validation rounds according to the standard guidelines to show the regulatory bodies that each batch is the same before we can start commercialisation,” said Leonard Ariff.

Meanwhile, on challenges, he said the depreciation of the ringgit against the US dollar had negatively impacted its pharmaceutical and polymer businesses, as most of the raw materials were imported.

“But the polymer business has a larger natural hedge, since around 40% to 50% of products are exported in US dollars, while pharmaceutical exports is currently about 12% so it is insufficient to give us a natural hedge to buffer the impact of the exchange rate.

“We mitigate the impact by having a balanced portfolio between government, private and export supply,” he said.

He said the chemical business however benefited from a weaker ringgit as some of the products manufactured were imported in their completed form and were quoted in US dollars.

Moving forward, Leonard Ariff said as the country’s largest generic pharmaceutical manufacturer, CCM would consolidate its position to continue its steady progress in each of its core business. - Bernama

Read more at http://www.thestar.com.my/business/business-news/2017/05/24/ccm-allocates-up-to-rm130mil-in-capex-this-year/#w5X1Ij4td6Lo5PMi.99

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