KUALA LUMPUR: CI Holdings Bhd (CI Holdings) has received its shareholders’ nod for the acquisition of Continental Resources Sdn Bhd (CRSB), said group managing director Datuk Johari Abdul Ghani after the company’s extraordinary general meeting (EGM) held yesterday.
“The shareholders have waited for almost a year to see when CI Holdings will acquire a new business. Now, we have concluded the deal, and with the acquisition of CRSB, we are looking at expanding our business capacity,” he said.
On Jan 2 this year, CI Holdings announced it has proposed to acquire 100 per cent of CRSB comprising 1.8 million shares of RM1.00 each for RM42 million.
Johari also said CRSB, which is mainly involved in packaging and blending of edible oil products, has recorded a turnover of RM200 million and net profit of RM6 million.
“We see the acquisition as an opportunity to expand our business. Currently, global consumption of edible oils stood at about 185 million metric tonnes, while for local consumption, it is at 2.5 million metric tonnes,” he added.
CRSB’s capacity of producing edible oil is 120,000 metric tonnes.
He noted there is still room for improvement as the company was in the midst of building a new plant to double CRSB’s capacity in the production of edible oil.
“We are investing a total of RM30 million for land, building and machinery for the new plant, which is situated next to our existing plant in Port Klang. It will be completed in a year,” he added.
The new plant was able to double the current capacity of CRSB, said Johari, adding that the company would also maximise the capacity of its existing plant, from 85 per cent or 120,000 metric tonnes currently to full production capacity, which was estimated at about 300,000 metric tonnes.
“It will take about four to five years, however, depending on the demand. If the demand is good, we can expect the maximisation of production to be between three or four years,” he said.
Johari also said 85 per cent of its production is exported to 48 countries and the company was looking forward to expand its distribution network.
On its future prospect, he said the company was considering to tap into a similar line of business such as peanut oil, corn oil, canola oil, soya bean oil and coconut oil as part of its third phase expansion.
Turning to debt, he said, CI Holdings is currently debt-free with total cash of RM88 million.
CI Holdings’ principal activities is focused on branded consumer products while its subsidiaries are currently involved in the manufacturing and trading of water taps and other plumbing accessories. — Bernama