Materia Medica Malaysiana

CCM turning to pharmaceuticals

CHEMICAL Company of Malaysia Bhd (CCM), already a stable company with a solid earnings base in the fertiliser and chemicals business, is turning to pharmaceuticals as its next growth contributor.

Managing director Dr Mohamad Hashim Tajudin said plans were already in place to expand the pharmaceuticals business, which was expected to contribute strongly to earnings in the near future.

“We intend to achieve an optimum 40% contribution from pharmaceuticals and 30:30 equally from fertiliser and chemicals. That is the long-term aim of the company,” he told StarBiz in an interview.

Hashim said the company had started on a RM50mil expansion of its pharmaceuticals factory, Upha Pharmaceuticals in Bangi, to be completed by 2006 and fully operational by 2007. “With the expansion, we hope to increase the capacity by 50%,” he added.

Hashim said CCM would now concentrate on the manufacturing side after selling off its retailing outlets, undertaken through Prima Health Pharmacy.

The sale, completed recently, is expected to boost CCM's bottom line as Prima Health is running at a loss of RM3mil a year.

Apart from manufacturing generic drugs and vitamins, CCM is also venturing into the distribution of drugs manufactured by Impax Laboratories of the United States, where CCM has a small stake in the Nasdaq-listed counter.

The stake was purchased in 1997 at US$2 per share and is now hovering at about US$15 per share.

But Hashim said the distribution rights with Impax held a lot of potential as it would enable CCM to distribute and market the drugs produced by Impax in Malaysia and other South-East Asian countries.

It is also looking at collaborating with Impax to produce generic drugs in Malaysia to be sold in this region.

Other than Impax, CCM also holds shares in another biotechnology start-up in Vancouver, Cardiome Pharma, which is developing drugs to treat cardiac diseases.

CCM's initial investment in Cardiome is C$2 per share and is now estimated to be worth between C$5 and C$6.

Despite the focus on pharmaceuticals, Hashim said the two other divisions, fertiliser and chemicals, would continue to be developed.

“For instance, we are looking at doing more business within the PNB group of companies. And together with other non-PNB plantation players, we are hoping of increasing the sales volume of our fertiliser by about 20% to 30%,” he said.

Hashim said the company's chemical business was also doing well, with stable demand from the oleochemicals and water treatment sectors.