MIRA INFORM REPORT

 

 

Report Date :

21.11.2012

 

IDENTIFICATION DETAILS

 

Name :

BP Chemicals (Malaysia) Sdn. Bhd.

 

 

Formerly Known As :

AMOCO CHEMICAL (MALAYSIA) SDN BHD

 

 

Registered Office :

Level 22, Quill 7, 9, Jalan Stesen Sentral 5, Kuala Lumpur Sentral, 50470 Kuala Lumpur, Wilayah Persekutuan

 

 

Country :

Malaysia

 

 

Financials (as on) :

31.12.2011

 

 

Date of Incorporation :

17.11.1993

 

 

Com. Reg. No.:

281845-P

 

 

Legal Form :

Private Limited

 

 

Line of Business :

Manufacturing of Purified Terehthalic Acid (PTA).

 

 

No. of Employees :

230

 

RATING & COMMENTS

 

MIRA’s Rating :

Ca

 

RATING

STATUS

PROPOSED CREDIT LINE

11-25

Ca

Adverse factors are apparent. Repayment of interest and principal sums in default or expected to be in default upon maturity

Limited with full security

 

Status :

Poor

Payment Behaviour :

Slow and delayed

Litigation :

Clear

 

NOTES:

Any query related to this report can be made on e-mail: infodept@mirainform.com while quoting report number, name and date.

 

ECGC Country Risk Classification List – June 30th, 2012

 

Country Name

Previous Rating

(31.03.2012)

Current Rating

(30.06.2012)

Malaysia

A2

A2

 

Risk Category

ECGC Classification

Insignificant

 

A1

Low

 

A2

Moderate

 

B1

High

 

B2

Very High

 

C1

Restricted

 

C2

Off-credit

 

D

 

 

MALAYSIA - ECONOMIC OVERVIEW

 

Malaysia, a middle-income country, has transformed itself since the 1970s from a producer of raw materials into an emerging multi-sector economy. Under current Prime Minister NAJIB, Malaysia is attempting to achieve high-income status by 2020 and to move farther up the value-added production chain by attracting investments in Islamic finance, high technology industries, biotechnology, and services. The NAJIB administration also is continuing efforts to boost domestic demand and reduce the economy's dependence on exports. Nevertheless, exports - particularly of electronics, oil and gas, palm oil and rubber - remain a significant driver of the economy. As an oil and gas exporter, Malaysia has profited from higher world energy prices, although the rising cost of domestic gasoline and diesel fuel, combined with strained government finances, has forced Kuala Lumpur to begin to reduce government subsidies. The government is also trying to lessen its dependence on state oil producer Petronas. The oil and gas sector supplies more than 40% of government revenue. The central bank maintains healthy foreign exchange reserves, and a well-developed regulatory regime has limited Malaysia''s exposure to riskier financial instruments and the global financial crisis. Nevertheless, Malaysia could be vulnerable to a fall in commodity prices or a general slowdown in global economic activity because exports are a major component of GDP. In order to attract increased investment, NAJIB has raised possible revisions to the special economic and social preferences accorded to ethnic Malays under the New Economic Policy of 1970, but he has encountered significant opposition, especially from Malay nationalists and other vested interests.

 

Source : CIA

 

 

EXECUTIVE SUMMARY

 

 

REGISTRATION NO.

:

281845-P

COMPANY NAME

:

BP CHEMICALS (MALAYSIA) SDN. BHD.

FORMER NAME

:

AMOCO CHEMICAL (MALAYSIA) SDN BHD (19/11/2002)

INCORPORATION DATE

:

17/11/1993

 

 

 

 

 

 

COMPANY STATUS

:

EXIST

LEGAL FORM

:

PRIVATE LIMITED

LISTED STATUS

:

NO

 

 

 

 

 

 

REGISTERED ADDRESS

:

LEVEL 22, QUILL 7, 9, JALAN STESEN SENTRAL 5, KUALA LUMPUR SENTRAL, 50470 KUALA LUMPUR, WILAYAH PERSEKUTUAN, MALAYSIA.

BUSINESS ADDRESS

:

LOT 116, KAWASAN PERINDUSTRIAN GEBENG , P O BOX 11 , BALOK, 26080 KUANTAN, PAHANG, MALAYSIA.

TEL.NO.

:

09-5825500

FAX.NO.

:

09-5833082

WEB SITE

:

www.bp.com

CONTACT PERSON

:

CHUNG RAE JOON ( GENERAL MANAGER )

 

 

 

INDUSTRY CODE

:

24290

PRINCIPAL ACTIVITY

:

MANUFACTURING OF PURIFIED TEREHTHALIC ACID (PTA)

AUTHORISED CAPITAL

:

MYR 360,000,000.00 DIVIDED INTO 

ORDINARY SHARE 359,000,000.00 OF MYR 1.00 EACH.

PREFERENCE SHARE 500,000.00 OF MYR 1.00 EACH.

OTHER SHARE 500,000.00 OF MYR 1.00 EACH.

ISSUED AND PAID UP CAPITAL

:

MYR 358,732,541.00 DIVIDED INTO

ORDINARY SHARES 343,862,345 CASH AND 14,781,200 OTHERWISE OF MYR 1.00 EACH.

PREFERENCE SHARES 9,196 CASH OF MYR 1.00 EACH.

OTHER SHARES 79,800 CASH OF MYR 1.00 EACH.

 

 

 

SALES

:

MYR 2,623,419,000 [2011]

NET WORTH

:

MYR <744,312,000> [2011]

 

 

 

STAFF STRENGTH

:

230 [2012]

BANKER (S)

:

HSBC BANK MALAYSIA BHD

MALAYAN BANKING BHD

LITIGATION

:

CLEAR

DEFAULTER CHECK

:

CLEAR

FINANCIAL CONDITION

:

POOR

PAYMENT

:

N/A

MANAGEMENT CAPABILITY

:

WEAK

 

 

 

COMMERCIAL RISK

:

MODERATE

CURRENCY EXPOSURE

:

MODERATE

GENERAL REPUTATION

:

SATISFACTORY

INDUSTRY OUTLOOK

:

AVERAGE GROWTH

PROPOSED CREDIT LIMIT

:

NIL

 

 

HISTORY / BACKGROUND

 

The SC is a private limited company and is allowed to have a minimum of one and a maximum of forty-nine shareholders. As a private limited company, the SC must have at least two directors. A private limited company is a separate legal entity from its shareholders. As a separate legal entity, the SC is capable of owning assets, entering into contracts, sue or be sued by other companies. The liabilities of the shareholders are to the extent of the equity they have taken up and the creditors cannot claim on shareholders' personal assets even if the SC is insolvent. The SC is governed by the Companies Act, 1965 and the company must file its annual returns, together with its financial statements with the Registrar of Companies.

 

The SC is principally engaged in the (as a / as an) manufacturing of purified terehthalic acid (pta).

 

The SC is not listed on Bursa Malaysia (Malaysia Stock Exchange).

 

The immediate holding company of the SC is AMOCO CHEMICAL HOLDING BV., a company incorporated in NETHERLANDS.

 

The ultimate holding company of the SC is BP P.L.C., a company incorporated in UNITED KINGDOM.

 

The major shareholder(s) of the SC are shown as follows :

Name

Address

IC/PP/Loc No

Shareholding

(%)

AMOCO CHEMICAL HOLDING BV

 

20901

358,652,741.00

99.98

BP AMOCO CHEMICAL MALAYSIA HOLDING COMPANY

 

20902

79,800.00

0.02

 

 

 

---------------

------

 

 

 

358,732,541.00

100.00

 

 

 

============

=====

 

+ Also Director

 

DIRECTOR 1

 

Name Of Subject

:

MS. WONG WAI YEE

Address

:

TOWER 1,22D STAR CREST, 9 STAR CREST, WANCHAI,HONG KONG, MALAYSIA.

IC / PP No

:

KJ0023873

 

 

 

Date of Birth

:

30/09/1959

 

 

 

Nationality

:

CHINESE

 

 

 

Remark

:

OLD PP: H90028178

 

 

 

 

 

 

 

 

 

 

DIRECTOR 2

 

Name Of Subject

:

CHUNG RAE JOON

Address

:

4-1, BLOCK A, JALAN KELAB GOLF, OFF JALAN TELUK CHEMPEDAK, KUANTAN TEMBELING RESORT, 25250 KUANTAN, PAHANG, MALAYSIA.

IC / PP No

:

M04124290

 

 

 

Date of Birth

:

07/02/1948

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

DIRECTOR 3

 

Name Of Subject

:

CHUNG RAE JOON

Address

:

BLOCK B, LG-1, 1 KUANTAN TEMBELING RESORT, 25250 KUANTAN, PAHANG, MALAYSIA.

IC / PP No

:

MO4124290

 

 

 

Date of Birth

:

07/02/1948

 

 

 

Nationality

:

KOREAN

 

 

 

Remark

:

OLD PP: MP0177724

 

 

 

 

 

 

 

 

 

 

DIRECTOR 4

 

Name Of Subject

:

SEAN ZAHID PLANT

Address

:

1, LORONG PJU 7/22E, MUTIARA DAMANSARA, 47810 PETALING JAYA, SELANGOR, MALAYSIA.

IC / PP No

:

P099082854

 

 

 

Date of Birth

:

05/07/1969

 

 

 

Nationality

:

BRITISH

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

DIRECTOR 5

 

Name Of Subject

:

MR. MOHD ROSLAN BIN ISMAIL

Address

:

LOT 4450, TAMAN INDAH 2, KG. CACAR BARU, PAKA, 23100 PAKA, TERENGGANU, MALAYSIA.

 

 

 

New IC No

:

660528-03-5847

Date of Birth

:

28/05/1966

 

 

 

Nationality

:

MALAYSIAN

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

DIRECTOR 6

 

Name Of Subject

:

YANG SHIXU

Address

:

ROOM 2602, BUILDING 4, FOUR SEASON, GARDEN, 149, DONGAN ROAD, SHANGHAI, 200032, PEOPLES REPUBLIC OF CHINA, MALAYSIA.

IC / PP No

:

G45763844

 

 

 

Date of Birth

:

08/11/1969

 

 

 

Nationality

:

CHINESE

Date of Appointment

:

03/11/2010

 

 

 

 

 

 

 

 

 

 

 

 

 

 

MANAGEMENT

 

 

 

1)

Name of Subject

:

CHUNG RAE JOON

 

Position

:

GENERAL MANAGER

 

 

AUDITOR

 

 

Auditor

:

ERNST & YOUNG

Auditor' Address

:

LEVEL 23A, MENARA MILENIUM, JALAN DAMANLELA,, PUSAT BANDAR DAMANSARA, DAMANSARA HEIGHTS, 50490 KUALA LUMPUR, WILAYAH PERSEKUTUAN, MALAYSIA.

 

 

 

 

 

COMPANY SECRETARIES

 

 

1)

Company Secretary

:

MS. CHEN BEE LING

 

 

 

 

 

New IC No

:

740719-06-5256

 

Address

:

B-3-3A PANGSAPURI IMPIAN, OFF JALAN PIPIT, BANDAR PUCHONG JAYA, 47100 PUCHONG, SELANGOR, MALAYSIA.

 

 

 

 

 

 

 

 

 

 

 

 

 

2)

Company Secretary

:

MS. CHIN NGEOK MUI

 

 

 

 

 

New IC No

:

640423-10-7826

 

Address

:

3,JALAN IBU KOTA EMPAT, TAMAN IBU KOTA, GOMBAK, 53100 KUALA LUMPUR, WILAYAH PERSEKUTUAN, MALAYSIA.

 

 

 

 

 

 

 

 

 

 

 

BANKING

 

Banking relations are maintained principally with :

1)

Name

:

HSBC BANK MALAYSIA BHD

 

 

 

 

 

2)

Name

:

MALAYAN BANKING BHD

 

 

 

 

 

The SC enjoys normal banking routine with above mentioned banker(s). No adverse record was found during our investigation.

 

 

ENCUMBRANCE (S)

 

No encumbrance was found in our databank at the time of investigation. 

 

 

LEGAL CHECK AGAINST SC

 

* A check has been conducted in our databank againt the SC whether the subject has been involved in any litigation. Our databank consists of 99% of the wound up companies in Malaysia.

 

No legal action was found in our databank. 

 

No winding up petition was found in our databank. 

 

 

DEFAULTER CHECK AGAINST SC

 

* We have checked through the SC in our defaulters' database which comprised of debtors that have been blacklisted by our customers and debtors that have been placed or assigned to us for collection since 1990. Information was provided by third party where the debt amount can be disputed. Please check with creditors for confirmation as alleged debts may have been paid since recorded or are being disputed. 

 

No blacklisted record & debt collection case was found in our defaulters' databank. 

 

 

PAYMENT RECORD

 

 

SOURCES OF RAW MATERIALS:

Local

:

YES

Overseas

:

YES

 

 

 



CLIENTELE

 

 

Local

:

YES

 

Domestic Markets

:

MALAYSIA

Overseas

:

YES

 

 

 

Export Market

:

ASIA

Credit Term

:

30 - 60 DAYS

 

 

 

 

 

 

Payment Mode

:

CHEQUES,TELEGRAPHIC TRANSFER (TT),LETTER OF CREDIT (LC)

Type of Customer

:

MEDICAL INDUSTRIES,LABORATORIES,CHEMICAL INDUSTRY,PETROCHEMICAL INDUSTRIES,PHARMACEUTICAL INDUSTRIES

 

 

 

 

 

 

CUSTOMER(S)

:

1) TORAY BASF PBT RESIN SDN BHD

 

 

OPERATIONS

 

 

Products manufactured

:

PURIFIED TEREHTHALIC ACID (PTA)

 

 

 

Brand Name

:

BP

 

 

 

 

Award

:

1 ) MS ISO 14001 Year :2000
2 ) MS ISO 9001 : 2000 Year :1998

 

 

 

 

 

Competitor(s)

:

EMERY OLEOCHEMICALS (M) SDN BHD
KL-KEPONG OLEOMAS SDN BHD
NATURAL OLEOCHEMICALS SDN BHD
NYLEX (MALAYSIA) BHD
PETRONAS CHEMICALS GROUP BERHAD

 

 

 

 

 

 

 

 

Member(s) / Affiliate(s)

:

FEDERATION OF MALAYSIAN MANUFACTURERS (FMM)

SMI ASSOCIATION OF MALAYSIA

SMALL & MEDIUM ENTERPRISE

MALAYSIAN INTERNATIONAL CHAMBER OF COMMERCE AND INDUSTRY (MICCI)

CHEMICAL INDUSTRIES COUNCIL OF MALAYSIA (CICM)

 

 

 

Ownership of premises

:

OWNED

 

 

Total Number of Employees:

 

YEAR

2012

2011

2010

2009

2008

2007

 

 

 

 

GROUP

N/A

N/A

N/A

N/A

N/A

N/A

 

 

 

COMPANY

230

230

212

212

240

245

 

 

 

 

Branch

:

NO

 

 

Other Information:


The SC is principally engaged in the (as a / as an) manufacturing of purified terehthalic acid (pta).

The SC produces the Purified Terehthalic (PTA) and chemicals to both private and government sectors.

The SC's PTA is the key raw material for the manufacture of polyester. It is a white powder that is produced from the oxidation of paraxylene, a hydrocarbon obtained from naphtha.

It is also used to make polyethylene terephthalate (PET), the primary container resin for applications such as carbonated beverage bottles and food containers. 

 

 

PROJECTS


No projects found in our databank 

 

 

CURRENT INVESTIGATION

 

Latest fresh investigations carried out on the SC indicated that :

 

Telephone Number Provided By Client

:

N/A

Current Telephone Number

:

09-5825500

Match

:

N/A

 

 

 

Address Provided by Client

:

LOT 116, KAWASAN PERINDUSTRIAN GEBENG , P O BOX 11 , BALOK,26080,KUANTAN,PAHANG.

Current Address

:

LOT 116, KAWASAN PERINDUSTRIAN GEBENG , P O BOX 11 , BALOK, 26080 KUANTAN, PAHANG, MALAYSIA.

Match

:

YES

 

 

 

Latest Financial Accounts

:

YES

 

Other Investigations


We contacted one of the staff from the Admin Department. She provided some information on the SC.

 

 

FINANCIAL ANALYSIS

 

 

Profitability

 

 

 

 

 

 

Return on Shareholder Funds

:

Unfavourable

[

<6.47%>

]

 

Return on Net Assets

:

Unfavourable

[

2.35%

]

 

 

 

 

 

 

 

 

The SC's unfavourable returns on shareholders' funds indicate the management's inefficiency in utilising its assets to generate returns.

 

 

 

 

 

 

 

Liquidity

 

 

 

 

 

 

Current Ratio

:

Favourable

[

2.73 Times

]

 

 

 

 

 

 

 

 

The SC was in good liquidity position with its current liabilities well covered by its current assets. With its net current assets, the SC should be able to repay its short term obligations.

 

 

 

 

 

 

 

Solvency

 

 

 

 

 

 

Liability Ratio

:

Unfavourable

[

<2.89 Times>

]

 

 

 

 

 

 

 

 

The SC has an unfavourable liabilities ratio and it may face financial difficulties if no additional capital is injected.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Overall Assessment :

 

 

 

 

 

 

The SC was in good liquidity position with its total current liabilities well covered by its total current assets. With its current net assets, the SC should be able to repay its short term obligations.

 

 

 

 

 

 

 

Overall financial condition of the SC : POOR

 

 

MALAYSIA ECONOMIC / INDUSTRY OUTLOOK

 

 

Major Economic Indicators:

2008

2009

2010

2011*

2012**

 

 

 

 

 

 

Population ( Million)

27.73

28.13

28.35

28.70

29.10

Gross Domestic Products ( % )

4.6

<0.5>

7.2

5.5

5.3

Domestic Demand ( % )

6.9

2.9

6.3

4.8

7.6

Private Expenditure ( % )

7.1

<2.7>

8.1

7.0

8.7

Consumption ( % )

8.4

0.7

6.7

6.3

7.1

Investment ( % )

1.5

<17.2>

17.7

16.2

15.9

Public Expenditure ( % )

6.5

5.2

3.8

7.6

4.7

Consumption ( % )

11.6

3.1

0.2

8.9

3.0

Investment ( % )

0.7

8.0

2.8

0.6

7.0

 

 

 

 

 

 

Balance of Trade ( MYR Million )

129,563

89,650

118,356

116,058

-

Government Finance ( MYR Million )

<34,462>

<28,450>

<40,482>

<45,511>

<43,021>

Government Finance to GDP / Fiscal Deficit ( % )

<4.8>

<4.8>

<5.6>

<5.4>

<4.7>

Inflation ( % Change in Composite CPI)

<3.3>

<5.2>

5.1

3.1

-

Unemployment Rate

3.7

4.5

3.9

3.3

-

 

 

 

 

 

 

Net International Reserves ( MYR Billion )

388

331

329

415

-

Average Risk-Weighted Capital Adequacy Ratio ( % )

1.91

2.87

2.20

3.50

-

Average 3 Months of Non-performing Loans ( % )

13.24

11.08

15.30

14.80

-

Average Base Lending Rate ( % )

6.72

5.53

6.30

6.60

-

Business Loans Disbursed( % )

11.6

10.5

14.7

15.3

-

Foreign Investment ( MYR Million )

23,261.4

22,156.8

22,517.9

23,546.1

-

Consumer Loans ( % )

-

-

-

-

-

 

 

 

 

 

 

Registration of New Companies ( No. )

41,599

41,578

44,148

-

-

Registration of New Companies ( % )

<4.0>

<0.1>

6.2

-

-

Liquidation of Companies ( No. )

27,992

39,075

25,585

-

-

Liquidation of Companies ( % )

23.7

39.6

<34.5>

-

-

 

 

 

 

 

 

Registration of New Business ( No. )

269,866

312,581

271,414

-

-

Registration of New Business ( % )

-

-

-

-

-

Business Dissolved ( No. )

18,885

19,345

19,738

-

-

Business Dissolved ( % )

<7.6>

2.4

2.0

-

-

 

 

 

 

 

 

Sales of New Passenger Cars (' 000 Unit )

497.5

486.3

543.6

363.0

-

Cellular Phone Subscribers ( Million )

25.1

30.1

32.8

35.3

-

Tourist Arrival ( Million Persons )

21.5

23.6

24.6

25.3

-

Hotel Occupancy Rate ( % )

68.0

58.0

63.0

51.3

-

 

 

 

 

 

 

Credit Cards Spending ( % )

17.1

12.8

14.1

15.6

-

Bad Cheque Offenders (No.)

34,834

36,667

33,568

27,208

-

Individual Bankruptcy ( No.)

13,907

16,228

18,119

16,155

-

Individual Bankruptcy ( % )

5.1

16.7

11.7

<10.8>

-

 

 

 

 

 

 



INDUSTRIES ( % of Growth ):

2008

2009

2010

2011*

2012**

 

 

 

 

 

 

Agriculture

3.6

0.4

2.1

4.7

4.1

Palm Oil

7.0

<1.1>

<3.4>

7.3

-

Rubber

<1.1>

<19.8>

9.9

6.4

-

Forestry & Logging

<1.5>

<5.9>

<3.3>

<4.7>

-

Fishing

4.0

5.5

5.6

2.8

-

Other Agriculture

5.9

9.0

7.9

8.5

-

Industry Non-Performing Loans ( MYR Million )

393.0

413.7

508.4

634.1

-

% of Industry Non-Performing Loans

<2.0>

1.3

2.1

3.2

-

 

 

 

 

 

 

Mining

<0.8>

<3.8>

0.2

<2.4>

2.5

Oil & Gas

12.7

2.1

0.5

<1.7>

-

Other Mining

-

-

-

-

-

Industry Non-performing Loans ( MYR Million )

36.0

44.2

49.7

46.5

-

% of Industry Non-performing Loans

0.1

0.1

0.1

0.1

-

 

 

 

 

 

 

Manufacturing #

1.3

<9.4>

11.4

5.6

4.5

Exported-oriented Industries

2.7

<19.0>

12.1

2.8

-

Electrical & Electronics

2.4

<30.3>

28.4

<4.9>

-

Rubber Products

4.2

<10.1>

25.3

15.4

-

Wood Products

<6.0>

<24.1>

20.1

<7.3>

-

Textiles & Apparel

1.9

<19.5>

<0.4>

14.8

-

Domestic-oriented Industries

9.9

<9.8>

16.3

6.3

-

Food, Beverages & Tobacco

9.5

0.2

3.0

4.2

-

Chemical & Chemical Products

1.4

<7.7>

16.2

5.6

-

Plastic Products

6.5

<9.1>

2.4

3.8

-

Iron & Steel

16.8

<32.7>

29.3

2.4

-

Fabricated Metal Products

14.7

<2.5>

14.9

25.2

-

Non-metallic Mineral

8.3

<15.5>

20.2

16.3

-

Transport Equipment

27.1

<13.5>

36.5

<9.4>

-

Paper & Paper Products

8.6

<5.0>

18.7

15.6

-

Crude Oil Refineries

7.8

0.2

<11.4>

9.3

-

Industry Non-Performing Loans ( MYR Million )

5,729.4

6,007.3

6,217.5

6,537.2

-

% of Industry Non-Performing Loans

16.8

18.3

23.8

25.7

-

 

 

 

 

 

 

Construction

2.1

5.8

5.1

4.4

7.0

Industry Non-Performing Loans ( MYR Million )

4,149.8

3,241.8

4,038.5

3,856.9

-

% of Industry Non-Performing Loans

12.2

9.9

10.7

10.2

-

 

 

 

 

 

 

Services

7.3

2.6

6.5

6.4

6.5

Electric, Gas & Water

5.0

0.4

8.5

5.6

4.8

Transport, Storage & Communication

7.8

1.6

7.7

6.5

7.3

Wholesale, Retail, Hotel & Restaurant

10.0

2.8

4.7

5.2

6.9

Finance, Insurance & Real Estate

9.2

3.8

6.1

6.3

6.5

Government Services

8.6

2.0

6.7

7.6

5.6

Other Services

5.9

4.4

4.2

5.4

5.7

Industry Non-Performing Loans ( MYR Million )

8,281.4

6,631.3

7,384.6

6,825.2

-

% of Industry Non-Performing Loans

24.3

20.2

25.7

23.4

-

 

 

 

 

 

 

 

 

 

 

 

 

* Estimate / Preliminary

 

 

 

 

 

** Forecast

 

 

 

 

 

# Based On Manufacturing Production Index 

(Source : Department of Statistics / Economic Report / Bank Negara Report)

 

 

INDUSTRY ANALYSIS

 

 

MSIC CODE

 

24290 : Manufacture of other chemical products n.e.c

 

 

INDUSTRY :

MANUFACTURING

 

 

 


The manufacturing sector is expected to be driven by higher value-added activities in Malaysia. The GDP growth for first quarter 2012 indicating manufacturing maintain its growth of 4.5%, similar to year 2011.Malaysia recorded a 12% jump in approved investments in the manufacturing sector in the first quarter of 2012 compared with the corresponding period 2011. According to Federation of Malaysian Manufacturers (FMM), manufacturing sector expected to improve in the third quarter 2012 despite concerns over external developments and the rising cost of production.


The rubber products sub-sector is expected to remain resilient supported by continuous improvements in medical and healthcare standards in emerging markets as well as demand from niche markets such as the oil and gas sector for rubber hoses. Malaysia rubber exports are forecast to grow at 10%, at the end of 2012 driven by global demand for medical gloves as well as rubber tyres and tubes.Rubber glove exports make up 70 % of total rubber shipments in Malaysia due to hospitals and clinics place more intrest on rising health and hygiene awareness.


The Malaysia government has growth target of 6.5% for wood based furniture where estimated to reach up to RM53 billion by year 2020.The government providing pioneer status for tax exemption and investment tax allowance for this industry as a boost up step towards produce good quality product and to meet the world demand.


Chemical production are expected to show 6.2% in year 2012 and 7.5 % in year 2013 inline with Malaysia as one of the largest contributor in world Chemicals & Chemical industries.


According to Malaysian Iron and Steel Industry Federation, first half of 2012 would remain weak for the local steel industry due to eurozone crisis, slowdown in China's economy and less robust construction activities in the developed countries. At first quarter 2012, the average local steel price is trading atRM2,300 per tonne compared with the average international price of US$740 (RM2,331) per tonne.


According to the Department of Statistics, Malaysia during the first quarter 2012, the manufacturing output increased due to activities in major sub-sectors such as petroleum, chemical, rubber and plastic products (10.5 %), and non-metallic mineral products, basic metal and fabricated metal products (3.9 %). Meanwhile, it's also announced that the manufacturing sector's sales grew by 10 % in May 2012 to record RM52.5 billion compared with RM47.7 billion in May 2011. The Industrial Production Index (IPI ) increased 7.6 % in May (2012) due to increases in manufacturing (6.5 %). 


Tax and non-tax incentives provided by government encourage manufacturers to move up the value chain of manufacturing industry. The new growth initiatives by government in the manufacturing sector such as solar and medial services can be important drivers of growth apart from helping to diversify the manufacturing base and contributing to the resilience of the sector.

 

 

OVERALL INDUSTRY OUTLOOK : Average Growth



CREDIT RISK EVALUATION & RECOMMENDATION

 

 

Incorporated in 1993, the SC is a Private Limited company, focusing on manufacturing of purified terehthalic acid (pta). Having been in the industry for over a decade, the SC has achieved a certain market share and has built up a satisfactory reputation in the market. Having strong support from its holding company has enabled the SC to remain competitive despite the challenging business environment. The SC is a large entity with strong capital position.


Our investigation revealed that the SC serves both local and overseas clients. Penetrating into the Asia countries has well diversified its business risk and at the same time added strength to its capabilities in capturing higher market shares. However, being a loss making company indicates that the SC faces difficulties in the market. The SC is a fairly large and rapidly growing company with over 230 staff in its operations. An unfavourable return on shareholders' funds implies that the SC's management capability is weak.


As at year ended 2011, the SC has reported total turnover and pre-tax profit of MYR 2,623,419,000 and MYR 25,161,000 respectively. The SC has generated an unfavourable return on shareholders' funds indicating that the management was inefficient in utilising its funds to generate return. Although the SC is in good liquidity position, we noted that the SC has an unfavourable liabilities ratio and it may face financial difficulties if no additional capital is injected. The SC's unfavourable financial performance over the years has wiped out its shareholders' funds to a deficit of MYR 744,312,000. Therefore, the SC as a going concern is much dependent on its ability to generate sufficient cash flow and obtain additional financing to meet its future obligations.


The SC's supplier are from both the local and overseas countries. This will eliminates the risk of dependency on deliveries from a number of key suppliers and insufficient quantities of its raw materials.


The industry shows an upward trend and this trend is very likely to sustain in the near terms. However, the SC does not take any advantage from this favourable condition as it is making losses. The SC should adopt more competitive strategies to retain its business position in the market.


Although having support from its immediate and ultimate holding companies, the management not able to turn the SC into profit making company reflecting its poor management. In view of this, we are strictly against granting any credit to the SC.

 

 

PROFIT AND LOSS ACCOUNT

 

 

THE FINANCIAL STATEMENTS WERE PREPARED IN ACCORDANCE WITH MALAYSIAN FINANCIAL REPORTING STANDARDS(FRS)

BP CHEMICALS (MALAYSIA) SDN. BHD.

 

Financial Year End

31/12/2011

Months

12

Consolidated Account

Company

Audited Account

YES

Unqualified Auditor's Report (Clean Opinion)

YES

Financial Type

SUMMARY

Currency

MYR

 

 

TURNOVER

2,623,419,000

 

----------------

Total Turnover

2,623,419,000

 

----------------

 

 

PROFIT/(LOSS) FROM OPERATIONS

25,161,000

 

----------------

PROFIT/(LOSS) BEFORE TAXATION

25,161,000

Taxation

23,016,000

 

----------------

PROFIT/(LOSS) AFTER TAXATION

48,177,000

 

----------------

RETAINED PROFIT/(LOSS) BROUGHT FORWARD

 

As previously reported

<1,157,625,000>

 

----------------

As restated

<1,157,625,000>

 

----------------

PROFIT AVAILABLE FOR APPROPRIATIONS

<1,109,448,000>

 

----------------

RETAINED PROFIT/(LOSS) CARRIED FORWARD

<1,109,448,000>

 

=============

 

 

 

 

BALANCE SHEET

 

 

BP CHEMICALS (MALAYSIA) SDN. BHD.

 

ASSETS EMPLOYED:

 

FIXED ASSETS

491,849,000

 

 

 

----------------

TOTAL LONG TERM ASSETS

491,849,000

 

 

CURRENT ASSETS

 

TOTAL CURRENT ASSETS

915,296,000

 

----------------

TOTAL ASSET

1,407,145,000

 

=============

 

 

CURRENT LIABILITIES

 

TOTAL CURRENT LIABILITIES

335,120,000

 

----------------

NET CURRENT ASSETS/(LIABILITIES)

580,176,000

 

----------------

TOTAL NET ASSETS

1,072,025,000

 

=============

 

 

SHARE CAPITAL

 

Ordinary share capital

358,644,000

 

----------------

TOTAL SHARE CAPITAL

358,644,000

 

 

RESERVES

 

Share premium

6,492,000

Retained profit/(loss) carried forward

<1,109,448,000>

 

----------------

TOTAL RESERVES

<1,102,956,000>

 

 

 

----------------

SHAREHOLDERS' FUNDS/EQUITY

<744,312,000>

 

 

LONG TERM LIABILITIES

 

TOTAL LONG TERM LIABILITIES

1,816,337,000

 

----------------

 

1,072,025,000

 

=============

 

 

 

 

 

FINANCIAL RATIO

 

 

BP CHEMICALS (MALAYSIA) SDN. BHD.

 

TYPES OF FUNDS

 

Net Liquid Assets

580,176,000

Net Current Assets/(Liabilities)

580,176,000

Net Tangible Assets

1,072,025,000

Net Monetary Assets

<1,236,161,000>

 

 

BALANCE SHEET ITEMS

 

Total Liabilities

2,151,457,000

Total Assets

1,407,145,000

Net Assets

1,072,025,000

Net Assets Backing

<744,312,000>

Shareholders' Funds

<744,312,000>

Total Share Capital

358,644,000

Total Reserves

<1,102,956,000>

 

 

LIQUIDITY (Times)

 

Current Ratio

2.73

 

 

SOLVENCY RATIOS (Times)

 

Liabilities Ratio

<2.89>

Assets Backing Ratio

2.99

 

 

PERFORMANCE RATIO (%)

 

Operating Profit Margin

0.96

Net Profit Margin

1.84

Return On Net Assets

2.35

Return On Capital Employed

2.35

Return On Shareholders' Funds/Equity

<6.47>

 

FOREIGN EXCHANGE RATES

 

Currency
Unit

Indian Rupees

US Dollar

1

Rs.54.91

UK Pound

1

Rs.87.38

Euro

1

Rs.70.23

 

INFORMATION DETAILS

 

Report Prepared by :

SMN

 

RATING EXPLANATIONS

 

RATING

STATUS

 

 

PROPOSED CREDIT LINE

>86

Aaa

Possesses an extremely sound financial base with the strongest capability for timely payment of interest and principal sums

 

Unlimited

71-85

Aa

Possesses adequate working capital. No caution needed for credit transaction. It has above average (strong) capability for payment of interest and principal sums

 

Large

56-70

A

Financial & operational base are regarded healthy. General unfavourable factors will not cause fatal effect. Satisfactory capability for payment of interest and principal sums

 

Fairly Large

41-55

Ba

Overall operation is considered normal. Capable to meet normal commitments.

 

Satisfactory

26-40

B

Capability to overcome financial difficulties seems comparatively below average.

 

Small

11-25

Ca

Adverse factors are apparent. Repayment of interest and principal sums in default or expected to be in default upon maturity

 

Limited with full security

<10

C

Absolute credit risk exists. Caution needed to be exercised

 

 

Credit not recommended

----

NB

New Business

----

 

This score serves as a reference to assess SC’s credit risk and to set the amount of credit to be extended. It is calculated from a composite of weighted scores obtained from each of the major sections of this report. The assessed factors and their relative weights (as indicated through %) are as follows:

 

Financial condition (40%)            Ownership background (20%)                 Payment record (10%)

Credit history (10%)                    Market trend (10%)                                Operational size (10%)

 

PRIVATE & CONFIDENTIAL : This information is provided to you at your request, you having employed MIPL for such purpose. You will use the information as aid only in determining the propriety of giving credit and generally as an aid to your business and for no other purpose. You will hold the information in strict confidence, and shall not reveal it or make it known to the subject persons, firms or corporations or to any other. MIPL does not warrant the correctness of the information as you hold it free of any liability whatsoever. You will be liable to and indemnify MIPL for any loss, damage or expense, occasioned by your breach or non observance of any one, or more of these conditions

This report is issued at your request without any risk and responsibility on the part of MIRA INFORM PRIVATE LIMITED (MIPL) or its officials.