Business

Published: Friday November 20, 2009 MYT 2:48:00 PM
Updated: Friday November 20, 2009 MYT 3:39:41 PM

Saamchem to invest US$2.2mil in new Indonesian subsidiary


Chief executive officer Ng Thin Poh said the subsidiary would be incorporated with an initial paid-up capital of US$250,000 which would subsequently be increased to US$1 million.

Samchem today signed a shareholders agreement with Herisun Hassan, president and director of PT Prasandha Byantara Abadi (PBA), to form the new subsidiary in the Indonesian capital.

"Under this strategic partnership, we will hold a 60 per cent majority stake," Ng told reporters after the signing.

The new subsidiary will purchase the necessary fixed assets, including a factory, warehouse, administrative office and a fleet vehicles for logistics needs.

"The market value of these assets is expected to be approximately US$1.6 million (approximately RM5.4 million)," Ng disclosed.

Samchem expects a strong revenue stream of RM100 million from the Indonesian market in 2011 with the new subsidiary and in line with the booming industrial sector there.

"This is indeed a win-win situation for both parties with the new subsidiary able to tap into Samchem's expertise in the chemical supply chain solutions.

"Samchem on the other hand, would be able to utilise the existing distribution network in Indonesia, to market industrial chemicals," said Herisun.

According to Ng, the Indonesian market contributed RM4 million or 23 percent to the group's foreign revenue of RM17.5 million in 2008.

"With this new venture, we will introduce a lot of new products, new agencies and distributors, to further expand in the country," he said.

The new subsidiary, which is expected to begin operations in the first quarter next year, will effectively enlarge the company's revenue base and be poised to take on a leading position in the ndonesian chemicals market.

The Indonesian chemicals market is dstimated to be at least three times that of Malaysia.

PBA was incorporated in Jakarta in early 1997 as a chemical distribution company and its network stretches beyond major cities such as Jakarta, Bandung, Surabaya and includes Java Island.

Samchem currently markets over 400 industrial chemical products to an extensive client network of more than 2,500 in the region.

It offers seamless supply chain solutions to global petrochemical companies that cater to a wide spectrum of applications. Some of the group's long established industrial chemical suppliers include ExxonMobil,Shell, BASF Petronas and OPTIMAL Chemical. - Bernama

 
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