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Wednesday April 14, 2010
By DAVID TAN
It plans to locate its second facility in Indonesia
GEORGE TOWN: Texchem Resources Bhd plans to set up a second seafood processing facility in the Asean region and expand its disposable medical devices manufacturing activities.
Indonesia was a potential location for the facility which required an initial investment of RM15mil to RM20mil, chairman Tan Sri Fumihiko Konishi told StarBiz
Texchem operates a seafood processing facility in Myanmar under A.S.K. Andaman Ltd that sources about 60% of its seafood supply from Malaysia and the balance from Myanmar.
“Over the past year, supply from the west coast of Malaysia has dwindled due to overfishing and climatic change,” said Konishi.
At the same time, orders for processed food from China and South Korea were increasing on the back of improving economy, he said.
“Thus, we need to find an alternative site to source our seafood and we are looking at Indonesia as one of the potential locations, with plans to set up a seafood processing facility there this or next year,” he said.
A second seafood manufacturing facility in the region would further reduce the dependency of the group’s seafood supplies from Malaysia.
Besides Andaman, the group manufactures and trades through subsidiaries such as Texchem Food Sdn Bhd and Sea Master Trading Sdn Bhd, and Ocean Food Pioneer Sdn Bhd.
The group produced over 23,000 tonnes of processed seafood products last year.
The products, which include processed fish, squid, prawns and surimi, are still unable to enter the Europe, as it has yet to obtain clearance from the local authorities as well as from the European Union.
So far, only six companies from Malaysia were able to export seafood products to Europe, which offers 5% to 10% higher selling price than China and South Korea.
On Texchem’s disposable medical manufacturing activities, Konishi said it would spend up to RM30mil to expand the business in the next two years.
“We started manufacturing disposable syringes and other disposable medical devices two years ago. This year, we are going to expand the business aggressively,” he said.
Konishi expects the group’s industrial division to drive the group’s revenue for the current year ending Dec 31.
The industrial division is involved in the manufacturing of chemicals for the textile industry and the trading of chemicals for the general industries.
“The industrial division is expected to contribute about 35% to the group’s revenue this year, up by about 5% from last year. The food, packaging and family care divisions are expected to contribute 25%, 20% and 15% respectively,” he said.
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