Demand for one of the main components in sanitisers has increased in the last 6 months due to pandemic
by ASILA JALIL / pic By RAZAK GHAZALI
ANCOM Bhd eyes increasing its yearly production of ethanol to 10 million litres from the current six million litres in an effort to increase Malaysian made ethanol in the market and help curb the spread of the Covid-19 virus.
Ancom CEO Lee Cheun Wei (picture) said the demand for ethanol, which is one of the main components in alcohol-based sanitisers along with isopropyl alcohol, has increased in the last six months due to the pandemic.
The production of ethanol, which is done via its subsidiary Nylex (M) Bhd, will likely take 24 months to reach the planned capacity.
“We produce around six million litres of ethanol a year, and we are looking at expanding production to 10 million litres because Malaysia still imports ethanol from Thailand and other international markets. “Maybe by doing this, we can make Malaysia self-sufficient and to depend on our own Malaysian-produced ethanol in the market,” he told The Malaysian Reserve in an interview yesterday.
Although the requirement for ethanol has shot up in the last six months, Lee said the company is still thoroughly discussing the matter as the need for ethanol in sanitisers may reduce once the vaccine is out.
However, the company is looking at expansion for the sector and increasing production of the material.
Nylex recorded a net loss of RM1.52 million in its first quarter ended Aug 31, 2020 of its financial year 2021 (1QFY21), compared to a net loss of RM1.13 million a year ago.
Revenue for the company dropped 21.8% year-on-year in the quarter under review to RM245.92 million from RM314.57 million in the same period last year, mainly due to lower contribution across all its divisions.
Lee, however, said the company is seeing recovery in the second half of the calendar year (2H20) because of the recovery of the prices for some of the products sold by the company.
Meanwhile, Lee said the proposed reverse takeover (RTO) of Ancom Logistics Bhd by S5 Holdings Inc is “progressing well” and the company is still on track to completing the exercise.
“We are in the middle of due diligence and also in consultation with the authority. The completion of the exercise will likely be within 1H21,” said Lee.
In July, Ancom and its unit Ancom Logistics entered into a heads of agreement with MyEG Services Bhd’s subsidiary MyEG Capital Sdn Bhd, S7 Holdings Sdn Bhd, Merrington Assets Ltd and Avocat Sdn Bhd to undertake a pro-posed RTO of S5 Holdings.
The exercise entails a proposed acquisition by Ancom Logistics of S5 Holdings’ entire share capital from its shareholders at a price to be agreed upon by the parties subject to an independent valuer’s valuation report.
S5 Holdings is a global integrated security solutions provider that delivers solutions to governments and enterprises. One of its three subsidiaries, S5 Systems Sdn Bhd, is involved in the provision of national security solutions.
“Although we will have lesser shareholding, we will benefit from the growth of the information technology sector.
“It is progressing well, but it is still subject to a lot of conditions with the authority,” Lee said.