SCH diversifies into fertiliser business with purchase of firm

PETALING JAYA: SCH Group Bhd is diversifying into the fertiliser business through the acquisition of an 83.33% stake in PK Fertilizers (Sarawak) Sdn Bhd (PKF Sarawak) for RM19.05 million.
The purchase will be satisfied with RM11.45 million cash and the issuance of 40 million new SCH shares at an issue price of 19 sen per share.
SCH said in a filing with the stock exchange that it entered into a share sale agreement with PK Fertilizers Sdn Bhd today for the acquisition.
PKF Sarawak operates a fertiliser warehouse and processing plant in Bintulu. It reported a widened net loss of RM654,788 for the financial year ended Dec 31, 2017 from RM91,399 a year ago, due to lower margin on higher purchase price of raw materials.
Currently SCH is engaged in the business of distribution and supplying of quarry industrial products, machinery and equipment in Malaysia and Southeast Asia.
The diversification allows the group to mitigate its dependence on its existing business portfolio and activities.
“The board expects that the proposed acquisition of PKF Sarawak may contribute more than 25% of the net profits and/or net assets of the SCH group,” it added.
SCH closed unchanged at 20 sen today on 2.13 million shares traded.