CCM: Selling Medan Plant

Chemical Company of Malaysia Bhd (CCM) is keeping its options open for its facility in Medan, Indonesia. It has two options for the asset – either to sell it as a going concern or pare it down.

“There are two options. One is to sell it as a going concern, the other option is to sell the assets down. We were in discussions with a few parties, but at the same time, we are working in parallel. We are also going ahead with an asset sale, so whichever happens first,” said Group Managing Director Leonard Ariff Abdul Shatar, on the sidelines of the government-linked companies (GLC) graduation ceremony on Friday.

 

The facility has been shut down, with an impairment loss of RM36.8mil.

 

“The factory is still there, but we are now evaluating bringing some of the equipment from Medan back to some of our existing facilities here. And that would clear up the land and we would look for a buyer. But in the meantime, if any person comes in expressing interest, we are open for discussions,” said Leonard.

 

He said the company’s transformation process involved it writing off its investment in Medan last year. “We had some issues in the past and we are slowly trying to overcome that,” he said.

The company is still in the process of cleaning up a few things, and hopes to emerge stronger this year.

 

“We are on the right track. From the CCM point of view, the GLC transformation programme was very useful and we will continue with a lot of the practices that were stipulated in the programme,” he said, referring to the 10-year GLC Transformation Programme, which came to an end this year.

 

As to how it is managing with the depreciating ringgit, Leonard said the company had started hedging some of its capital purchases. He said CCM’s biggest foreign exchange exposure is in its fertiliser and pharmaceutical businesses. However, it has in the last three to four years carried out operational efficiency projects, which have “buffered” the impact.

 

On the flip side, a lot of CCM’s pharmaceutical devices as well as its fertilisers are exported in US dollars.

 

CCM reported a net profit of RM3.95mil for the first quarter ended March 31, 2015 compared with RM3.77mil in the same period previously. Revenue was lower at RM270.13mil during the quarter against RM273.77mil.

 /theSTAR 10-08-2015

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Malaysia: Ringgit fell to 17-year low

The ringgit’s exchange rate weakened to 3.91 against the USD, which is 17-year low, as the sell-off in the stock market intensified amid weakening growth prospects continuing to weigh down on investor sentiment.

A drop in the price of Brent crude oil, the benchmark for Malaysian petroleum products, back to below USD50 a barrel and falling prices of crude palm oil (CPO) to near RM2,000 a tonne added to the uncertainties.

 

The two commodities are the country’s major exports after electrical and electronic products.

 

Despite the weak ringgit, total exports declined 3.7% in the second quarter after having registered a 2.5% drop in the first quarter.

 

Analysts said weak external demand and a slowdown in domestic consumption was putting the brakes on economic growth.

 

Citi Research, a unit of Citigroup Global Markets Inc, yesterday projected Malaysia’s economic expansion may slow to 4% in the second quarter ended June 30 from the 5.6% achieved in the first quarter.

 

“With growth slowing, we also doubt Bank Negara will hike to defend the ringgit,” its economist Wei Zheng Kit said. Bank Negara kept its key overnight policy rate steady at 3.25% in July. The last interest rate hike was in July 2014.

 

The ringgit remained Asia’s worst-performing currency year-to-date, despite sharper declines by its regional counterparts over the past one month.

 

The ringgit’s 10.6% drop year-to-date has raised concerns that the currency has weakened too fast and too far. CIMB Research in a recent note predicted that it would take RM4 to buy one USD by the end of the year.

 

“There has been talk that Bank Negara is taking steps to reduce the volatility in the currency market,” said one currency dealer.

 

But the ringgit continued to face pressure amid a huge outflow of foreign funds from the stock market.

 

MIDF Research calculated that net foreign outflow so far this year had reached RM11.7bil. This adds to the RM6.9bil that had left the market last year.The pace and intensity of the sell-off by foreigners was reminiscent the country had experienced during the global financial crisis of 2008.

 

The drop in the price of crude oil “is not conducive for the ringgit and Malaysian equities,” the firm said. It was down 27% from a recent peak of USD67 a barrel in early May and about half the price compared with a year ago.

 

The Government had based its Budget 2015 assumption on the price of Brent at USD55 a barrel.

Citi Research said even if Brent stayed at USD50 a barrel, the full-year average oil price of USD54 a barrel would be close to the Budget assumption.

 

“With a continued current account surplus of 3%-3.5% of gross domestic product for 2015 as a whole, concerns over the impact of lower oil prices appear overblown,” Wei said.

 

/theSTAR 07-08-2015

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Malaysia's international reserves fell to US$96.7b

Bank Negara Malaysia’s international reserves totalled RM364.7bil (US$96.7bil) as of end-July 2015, a decline of RM14.7bil or US$3.8bil from two weeks ago.

“The reserves position is sufficient to finance 7.6 months of retained imports and is 1.1 times the short-term external debt,” the central bank said on Friday.

The reserves had fallen from the RM379.4bil (US$100.5bil) as at July 15. The reserves position as at July 15 was sufficient to finance 7.9 months of retained imports and was 1.1 times the short-term external debt.

The ringgit has weakened by nearly 12% against the US dollar year-to-date.

According to the BNM data, the international reserves had fallen from RM405.5bil (or US$116.0bil) as at Dec 31, 2014 compared with RM441.9bil (US$134.9bil) as at end-2013.

/theSTAR 07-08-2015

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NKEA: Healthcare EPP3 Report 2014

Pharmaceutical exports recorded a nine per cent growth, surpassing the targeted five per cent growth

for 2014

 

The total value of Malaysian pharmaceutical exports amounted to RM611 million against RM561

million for the year 2013.

This growth was punctuated by additional efforts from the Government and the Malaysian Organisation

of Pharmaceutical Industries (MOPI) to help home-grown pharmaceutical manufacturers penetrate overseas markets. 

 

Over the year, the Government collaborated with MOPI to conduct a major study on trade and nontrade

barriers. Among the five most important and new markets identified were Thailand, Vietnam, Turkey, 

Kazakhstan and Australia markets.

The Government had finalised the procedures on Off Take Agreements (OTA) for both Pharmaceutical

and Medical Device products that will encourage production and consumption of Made-in Malaysia health products. The OTA purchase agreements are expected to encourage MNCs and other

manufacturers to base their manufacturing here as they will be given 3year agreements (plus another

two years if they meet export criteria) as opposed to a two-year contract to supply the Government

The year also saw positive developments in the transfer of MNCs’ manufacturing operations to 

Malaysia. This was achieved by partnering foreign companies with local players. To date, 11 projects 

have been accorded EPP status under EPP 3. These are Hovid Bhd, Bicon Ltd, CCM, Kotra Pharma,

AJ Biologics, Impian Eksekutif Sdn Bhd, Servier, Ranbaxy, AFT Pharmaceuticals and Biocare. 

Additionally, AFT Pharmaceuticals, a privately owned company with operations in Australia and New 

Zealand, has agreed to partner a local manufacturer to produce orphan drugs here. This will boost the

image of local pharmaceutical manufacturers.

In a bid to expand its export markets, the Malaysian Government and MOPI commissioned a Trade 

Barrier Study in five target countries: Thailand, Vietnam, Turkey, Australia and Kazakhstan.

The objective of the study was to evaluate and prioritise the five most attractive countries for local

pharmaceutical companies to export their products to, and enable MOPI to build an extensive 

pharmaceutical market and achieve regulatory insight into the targeted countries. 

 

It also provides entry strategies with all the critical elements for the local companies for geographic 

expansion, providing Malaysian companies with the information to grow their capacities and meet the 

entry requirements.

Among the lessons learnt in boosting pharmaceutical sales and manufacturing is the time taken to

register a product. With improved coordination efforts, the registration period was cut from 18 months

to 60 working days for all EPP companies.

 

More needs to be done to ensure development of new molecules and penetration to new markets.

 

Strong support from the various Government agencies is one of the keys for the success of this EPP.

 /PEMANDU Annual Report 2014

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Organ donations: Pledge

There has been an increase of over 12,000 pledges to donate organs in 2014 compared with 2013, said National Transplant Resources Centre head (NTRC) Datin Dr Lela Yasmin Mansor.

She attributed this improvement to greater awareness among the people. Speaking to theSun, Lela said the number of pledges rose from 27,452 in 2013 to 39,882 in 2014.

"For the first half of this year we have keyed in 13,524 pledges into our systems," she added. Lela said the pledges were either in the form of organs or tissues.

In the first half of 2015, 110 people received kidney, liver and cornea transplants.

"The 110 people received their organs from 20 kidney donors, nine liver donors and 33 cornea donors," she said, noting countless others also benefited from heart valves and bone transplants.

Many individuals or their next-of-kin wanted to donate organs after death out of a sense of compassion.

"Unfortunately, in some cases, the organs were found to be incompatible with the intended recipient or infected during the donor's lifetime," said Lela, adding the need for immediate transplant meant storing certain organs for extended periods of time was not possible.

The raised awareness on organ donation can be attributed to medical professionals and NTRC's street campaign.

"Doctors are more likely to present the option of organ donation to the deceased's next-of-kin if he/she was their patient," said Lela, noting the doctor would consider it as their final duty to the patient.

Likewise 2014's street campaign saw NTRC personnel reach out to the public in both urban and rural areas in the country.

"Rather than wait for them to come to us, we went to them. Within four hours, over 5,000 pledges were raised throughout 77 locations nationwide," Lela said, expressing hope that this year's campaign would also garner a strong response.

/theSUN 02-08-2015

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Confusion in the TPPA for Pharmaceuticals?

If the Trans-Pacific Partnership (TPPA) gets signed as it is, consumer groups are worried that the increased price of medicines will force Malaysians to tighten their wallets again.

The Federation of Malaysian Consumers Associations secretary-general Datuk Paul Selvaraj said they were aware of the repercussions of the agreement if no amendments were made.

“The TPPA is currently being looked at, and our biggest concern is its impact on drugs. We feel that pharmaceutical companies are making medicines more expensive, and we have expres­sed these concerns before."

“We have to take another look at the agreement and find a way to get an outcome without negative impact to the consumers,” he said.

S.M. Mohamed Idris, president of the Consumers Association of Penang, explained that at its current state, the TPPA would make it more difficult for Malaysians to get access to generic drugs.

“The TPPA will increase the term of a patent. At present, the term is 20 years from the time a patent application is filed. This could be amended, with the TPPA, to 20 years after the patent is granted or after marketing approval is given by the Health Ministry. The term of patent will be much longer, thereby depriving the Malaysian consumer of cheaper generics for a long period of time,” he said.

Muslim Consumers Association of Malaysia president Datuk Nadzim Johan agreed with his counterparts that the TPPA required changes.

“Most, if not all consumer groups, are against it. There are just too many parts in the agreement that are not to the consumers’ advantage.”

Malaysian Pharmaceutical Society president Datuk Nancy Ho, when asked if consumers might put the blame of a price increase on pharmaceutical companies, said there were other factors contributing to pricing when the TPPA was signed.

But she agreed that more time was needed before the Govern­ment signed the agreement.

“People are still in an adjustment period after the implementation of the GST (Goods and Services Tax), so this may not be the best time (for the TPPA),” she said

/theSTAR 27-07-2015

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Malaysian Ringgit closes lower against USD

The Ringgit closed lower against the US dollar today, in line with most emerging Asian currencies, on cautious sentiment ahead of the US Federal Reserve's policy meeting.


At 5pm, the ringgit was quoted at 3.8140/8160 against the US dollar, touching its 17-year low, compared with 3.8080/8100 recorded last Friday. At 3.8140 it is at its weakest since September 1998. 

The Malaysian currency was pegged at 3.8000 between 1998 and 2005.

The central bank was spotted in the market trying to limit further losses in the worst-performing Asian currency so far this year. 

Malaysia's international reserves fell to $100.5 billion as of July 15 from $105.5 billion as of June 30, central bank data showed on July 23. 

 

A dealer said investors would closely monitor the outcome of the two-day meeting, which would commence later today.

"Furthermore, the weak commodity prices put additional pressure on the ringgit," he said.
The ringgit was also traded lower against other major currencies.

It fell against the Singapore dollar to 2.7866/7889 from 2.7763/7798 last week and declined against the yen to 3.0880/0909 from 3.0715/0733 last Friday.

The local unit depreciated against the pound sterling to 5.9201/9247 from 5.8978/8017 previously and weakened against the euro to 4.2248/2274 from 4.1652/1678 last week.

/Bernama/theSTAR 27-07-2015

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