Hu-Chems Invests $1 Billion in Bintulu Chemical Plant

BINTULU: Hu-Chems Fine Chemical Corporation broke ground yesterday on a new manufacturing plant for chemical products, marking the official start of construction of the facility.

The manufacturing plant, located in Tanjung Kudurong Industrial Area, Bintulu will be dedicated to produce ammonia, nitric acid and ammonium nitrate. Chief Minister of Sarawak, Datuk Patinggi Tan Sri Dr Haji Adenan Satem graced the groundbreaking ceremony, which was attended by Chairman of Taekwang Group, Park Yeon Cha, Ambassador of the Republic Korea in Malaysia, H.E Cho Byung Jae, CEO of the Malaysian Investment Development Authority (MIDA), Dato’ Azman Mahmud, and guests representing companies form Korea and Malaysia as well as local and federal government officials.

According to Dato’ Azman,”Hu-Chems has 14 manufacturing plants in Yeosu Chemical Industrial Park in Korea and is now expanding its operation in the ASEAN region. We are honoured that Hu-Chems selected Malaysia for the site of its first overseas chemical complex. The selection and swift implementation of the project is a testament to the continued attractiveness of Malaysia, especially for MNCs that want to have a strong presence in the emerging chemical and petrochemical ecosystem in this region. Hu-Chems will also be the first producer for ammonium nitrate in Malaysia. Once implemented, this project will reduce the importation of ammonia, nitric acid and ammonium nitrate and contribute significantly to the exports in the chemical products segment.”

He added that the company’s investment would bring positive economic benefits to the country in the coming years, particularly in Sarawak in the form of high income employment opportunities for Malaysian citizens, as well as increased usage of local infrastructure, financial service, information technology, utilities and logistics services for local businesses, among many others. Scheduled for completion by 2019, this project will provide about 400 new direct employment opportunities in highly skilled jobs, which will make up 91 per cent of the jobs created.

“Tanjung Kidurong Industrial Area is an oil and gas hub, which hosts many leading companies such as Malaysia LNG, Shell, Murphy ad ABF Sdn Bhd. Hu-Chems’ presence will increase the diversity of products available in the area and will be of strategic importance to the growth of downstream activities in the chemical industry,” said Dato’ Azman.

According to Hu-Chems, the company will be able to secure a base to enter overseas markets and ensure a stable source of materials. It will also enjoy the benefits of a larger export market for its products, which will likely serve as a platform to reinforce its leading position in the global fine chemical industry. The plant will be the first of its kind in Sarawak. As such, the State will enjoy a wide range of benefits, such as economic growth and improved profitability, by transitioning from material exports to high value-added industries. The economic forecast indicated that Malaysia’s GNI (Gross National Income) will grow by $3.1 billion.

Hu-Chems has a plan to investigate a second project (Phase 2) for its downstream such as polyurethane, synthetic fibre, and fertilizer, with the materials produced in the Phase 1 plant. For this plan, 495,000m2 of additional land was procured. Phased 2 is likely to start after Phase 1 is finalized. As part of Phase 2, Hu-Chems may spend $1billion on building a plant to process these downstream products.

The second project will enable the vertical integration of Phase 1’s produced materials. Thus second project for product manufacturing, while improving the economies of scale, will reinforce product competitiveness. Bintulu is expected to become the hub of fine chemical industries in Southeast Asia.

In his speech, Park emphasized the determination to “ensure the successful construction of the plant and the mutual growth of Hu-Chems and Sarawak.” Sarawak is blessed with an abundance of natural gas, one of the fundamental materials needed by Hu-Chems, and offers business-friendly government policies to attract investors, It is one of best places for foreign companies, such as Hu-Chems, to do business.