Business

Saturday November 21, 2009

Samchem partners Prasandha to enter Indonesia


KUALA LUMPUR: Industrial chemical distributor Samchem Holdings Bhd is expanding to Indonesia by forming a new subsidiary to tap the chemicals market there, estimated to be at least three times the size of the Malaysian market.

Chairman and chief executive officer Ng Thin Poh said the company was teaming up with shareholders of Indonesia-based chemical distribution company PT Prasandha Byantara Abadi to set up the new subsidiary.

“Samchem will fork out about US$2.2mil for the paid-up capital and asset acquisition (from Prasandha).

Ng Thin Poh (2nd from left) exchanging documents with Herisun Hassan. With them are Samchem executive director Datuk Ng Lian Poh (left) and executive director Tan Teck Beng.

“And when that is done, we will control 60% of the capital structure of the subsidiary that may begin its business in the first quarter next year,” he told a press conference yesterday after the signing of a shareholders’ agreement.

Prasandha president director Herisun Hassan and some minority shareholders will hold the balance 40% in the new unit.

Formed in 1997, Prasandha has distribution rights with global chemical manufacturers such as Shell, Hexion and Celanese, and is one of the most reliable chemical distribution companies in Indonesia.

The new company will be set up with an initial paid-up capital of US$250,000 that will subsequently be increased to US$1mil.

The new subsidiary will also purchase the necessary fixed assets from Prasandha for about US$1.6mil. Following this, Prasandha will be dissolved.

The new company will be named later.

Ng said Samchem expected the Indonesian business to contribute RM100mil revenue in 2011.

He expected Samchem to derive a third of its revenue in 2011 from overseas. Samchem is now present in Vietnam, China and Indonesia.

Ng was also optimistic about the chemical industry’s performance next year.

Herisun said the formation of the new company was timely as this would enable both parties to tap the huge potential in Indonesia.

Herisun, who will also be chief executive officer of the new subsidiary, said the venture was indeed a win-win situation for both parties.

“In the past decade, we have set up a strong distribution network in Indonesia and built a supplier base of mostly global chemical manufacturers, some of whom are common to both Samchem and Prasandha.

“The new subsidiary will be a able to tap into Samchem’s expertise in the chemical supply solutions, while Samchem will be able to utilise the (Prasandha’s) existing distribution network in Indonesia to market its industrial chemicals,” he said.


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