$TEXCHEM / 8702 (TEXCHEM RESOURCES BERHAD) -Highlights from Polymer Engineering, Industrial, Food, and Restaurant Divisions
Polymer Engineering:
The polymer engineering division is poised to benefit from the recovery in the hard disk drive (HDD) and semiconductor industries, along with steady demand from medical life science clients. Several high-margin projects are gaining momentum, with more initiatives expected to further boost profit margins and operational efficiency.
Industrial Division:
The industrial division is seeing a rebound in sales as customer inventory adjustments ease and chemical prices stabilize. The recent rise in chemical prices is expected to enhance margins, thanks to lower inventory costs. The division’s focus on bulk chemicals is yielding positive outcomes, with anticipated growth in sales and market share.
Food Division:
The food division has faced challenges due to foreign exchange (FX) control measures in Myanmar, which initially required converting a significant portion of export proceeds into local currency at unfavorable rates. However, the recent relaxation of these measures should help reduce losses.
Restaurant Division:
Sales momentum is expected to continue into the second half of 2024, aided by seasonal factors. The division has also consolidated suppliers, improving bargaining power. The strengthening of the Malaysian ringgit (MYR) is anticipated to lower raw material costs. The company has recently expanded into Indonesia and plans to open four new stores in FY24, which could drive significant growth given the large market potential.
The polymer engineering division stands out with its impressive projected growth, driven by recovery in key sectors and new high-margin projects. The industrial division’s focus on bulk chemicals and improving margins indicates steady performance. The food division is actively mitigating external challenges by diversifying supply chains and focusing on local sales, which should stabilize its operations. Meanwhile, the restaurant division is showing strong sales growth following restructuring, with expansion into Indonesia offering additional upside potential. Overall, the company appears to be executing well across its divisions, positioning itself for strong future growth.
