KUALA LUMPUR: Hextar Global Bhd has proposed to diversify its existing businesses to include trading of commodities, which include agriculture produces, energy resources, metals and minerals, and precious metals.
Hextar is an investment holding company with subsidiaries principally involved in the manufacturing, distribution and agency of agrochemicals, research and development activities; manufacturing and distribution of specialty chemicals as well as investment in shares and properties held for capital gain.
In a filing with Bursa Malaysia today, the company said in view of the challenging outlook for its agriculture segment and following the exit from the consumer products segment in June 2023, the group has been contemplating alternative businesses to diversify its source of revenue and profits to supplement as well as to mitigate the risks of solely relying on its existing businesses.
The proposed diversification is sought as the group expects its trading business to contribute more than 25 per cent or more of the net profits of the group and/or result in a diversion of 25 per cent or more of its net assets in the future, it noted.
"The exercise is also part of Hextar’s strategic initiatives to diversify its income streams by identifying and engaging in new viable businesses to reduce the company’s reliance on its existing businesses.
"The diversification is expected to contribute positively to the group's financial performance and in turn, improve Hextar’s shareholders’ value,” it shared.
Moving forward, Hextar viewed that the trading of commodities business is scalable and offers potentially higher future revenue growth for the group.
"The myriad of commodities which can be traded presents opportunities for the group to execute trades in line with the prevailing and expected future price movements of the commodities. As a start, the exercise allows Hextar to get a foothold in the durian industry.
"Considering all the relevant aspects, including the overview and prospects of the trading of the commodities market in Malaysia and the durian industry in Malaysia and China, the board is cautiously optimistic of the future prospects of the group,” it added. - Bernama