- Chemical Company of Malaysia is shutting down its fertiliser plant in Shah Alam and retrenching 232 staff due to prolonged negative market conditions.
- The Shah Alam plant, which commenced in 1966, experienced a pre-tax loss of RM4.3 million in 2014 and the business continued to face challenges in 2015.
- Demand for ammonium nitrate (AN) based fertilisers, which the plant manufacturers have reduced over the last five years as major customers switch from compound fertilisers to straights and mixtures that are cheaper.
Significance: The redundancy and asset impairment exercise is estimated to cost the group RM30 million and the closure of the plant is expected to be completed by 30 June 2016. Additionally, the firm has assured that there will not be supply disruption as the AN based fertiliser will be fulfilled through outsourcing to a third-party manufacturer.
Contributed by Shares Investment
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