PChem and BASF investing RM1.5bil in Kuantan plant

PETALING JAYA: Petronas Chemicals Group Bhd (PChem) and German chemicals giant BASF are investing US$500mil (RM1.5bil) in an integrated aroma ingredients production facility in Gebeng, Kuantan, expanding on an existing joint venture (JV) there.

The project, which is subject to a final investment decision by the board of PChem before the end of the year, will be executed on a 60:40 basis between BASF, the world’s largest chemicals maker, and PChem.

Both companies already have a JV in the form of BASF-Petronas Chemicals Sdn Bhd, which operates a complex in Gebeng, Kuantan, that produces acrylic monomers, oxo products and butanediol, also on a 60:40 basis.

PChem said in a statement to the stock exchange yesterday that the new aroma ingredients plant would enable the firm to meet growing global demand in the flavour and fragrance industry, especially in Asia.

The proposed complex will comprise a plant for citral and the precursor plants, which will be integrated with PChem and BASF’s facilities in Gebeng.

They will also invest in downstream production for aroma ingredients, including a new world-scale plant for L-menthol and a plant for citronellol.

To be developed in phases, the first plant will be operational by 2016, creating some 110 new employment opportunities.

“The integrated aroma chemicals complex would open up a new business frontier for PChem, tapping into the flavours, fragrance and pharmaceutical markets.

“This indeed presents exciting prospects for the company, as we endeavour to provide innovative customer solutions,” PChem chairman Datuk Wan Zulkiflee Wan Ariffin said.

“The Gebeng expansion adds further value creation to our existing product streams, and we are strengthening the JV by leveraging on our strategic partner’s technology and expertise in the aroma ingredients,” president/CEO Dr Abd Hapiz Abdullah said.

BASF is one of the leading producers of aroma ingredients worldwide, with a product range that includes geraniol, citronellol, linalool and L-menthol.

Aroma ingredients are sold to the flavour and fragrance industry and used mainly in home and personal care products and fine fragrances, as well as in the food industry. - The Star online

Kuok’s investment may spur more foreign interest in Iskandar

PETALING JAYA: “Sugar King” Robert Kuok's entry into Iskandar Malaysia will create a ripple effect, drawing more interest from international investors and creating new jobs and opportunities in the region.

“Because Kuok has close ties with China, more investments are also likely to pour into Iskandar Malaysia from the world's second-largest economy,” an industry observer told StarBiz.

Kuok had recently invested in a 5.06ha freehold land in Puteri Harbour, Johor, for about RM182mil.

The observer said the tycoon's entry into the region, incidentally his birthplace, would draw more international attention to the economic development in the southern region.

He also pointed out that Australian property mogul Lang Walker had invested in Iskandar because of Kuok's recommendation.

It was reported that Walker was alerted to the potential of Iskandar by Kuok, his partner in the Collins Square redevelopment project in Melbourne.

“With Kuok's help, Walker identified two sites in Johor Baru Lido Beach and Senibong, both of which were driven by the construction of a new coastal highway,” said the report.

Aside from Kuok's endorsement in the region spreading to the international business sphere, Iskandar is also set to be a beneficiary ensuing the inflow of these investments, he noted.

The observer said: “Johor's job growth prospects continue to rise on the strength of investments into Iskandar Malaysia.”

An analyst told StarBiz that the authorities would create job opportunities to support the ecosystem there.

She said the boom in different sectors like manufacturing from automobile manufacturing plants, niche developments like Motorsports City and services industries for resorts and theme parks would create various job opportunities.

She said there would be a snowball effect, as the jobs created would fuel further advancement in Iskandar.

She expected transaction prices in the region to head north, now that a record high per sq ft (psf) selling price of RM334 had been set for the Puteri Harbour land.

However, she was quick to note that the said piece of land was located in a prime spot and was one of the last few pieces fronting the marina.

The price came at a premium compared with the RM330 psf valued by Messrs Assetz Sdn Bhd.

Another analyst, meanwhile, said that while the RM182mil investment might not be as big as other transactions in the region, it was a mark of confidence from Kuok and a comeback of sorts, as the billionaire had stopped investing actively in his homeland for close to two decades. - Star online

Malaysia's February exports shrink 7.7% to RM52.46b

KUALA LUMPUR: Malaysia's February exports fell 7.7% to RM52.46bil from a year ago, due to the shorter working days and the festive season, the Statistics Department said.

It said on Friday, there was a decline in exports of electrical and electronic products, crude petroleum and palm oil.

"Lower exports to China, Japan, the USA and Singapore were main contributors to the decrease," it said.

The 7.7% contraction in exports was sharper than the consensus of a decline of 4.8%.

February imports in February fell 4.4% to RM44.26bil from a year ago, which was in contrast to consensus' expectations of a 3.5% increase.

The Statistics Department said the three main categories of imports by end use were intermediate goods valued at RM25.27bil or 57.1% share of total imports (down by 14.8%).

Capital goods totalled RM7.4bil or 16.7% of total imports (up 5.9%) and consumption goods accounted for RM2.95bil or 6.7% of total imports (down 7.6%).