KUALA LUMPUR, Dec 28 — Ancom Berhad has today expanded its wings in the agricultural chemicals industry after acquiring two livestock chemical businesses under Shennong Group for a total of RM23.9 million.
Through its wholly-owned subsidiary Ancom Crop Care Sdn Bhd, it will now own 80 per cent equity in Shennong Animal Health (Malaysia) Sdn Bhd and Vemedim Sdn Bhd for RM16.6 million and RM7.3 million respectively.
In a statement today, Ancom chief executive Lee Cheun Wei said Shennong is mainly involved in manufacturing and trading of chemical and animal health products, including livestock-related antibiotics, feed additives, supplements, and disinfectants for the domestic market.
“We are excited to expand our market footprint in the agricultural chemicals space from our core plant-related chemicals to include livestock chemicals. This is in line with our goal to position Ancom as an integrated solutions provider in the food supply chain,” Lee said,
“As global economies cope with the rising inflation and food prices, we believe businesses that are critical in helping to sustain and secure supply of livestock, such as Shennong Group, are primed for growth. Locally, we are witnessing initiatives by the government to improve the country’s self-sufficiency level.
Lee said this comes as Malaysia’s animal health and nutrition market is poised to grow at a compounded annual growth rate of 4.3 per cent between 2020 and 2025.
“In line with the prospects of the industry, the Proposed Acquisition also comes with a profit guarantee of RM4.6 million in PAT profit-after-tax a year for 2022 and 2023,” Lee said.
He also said that Ancom is looking forward to expanding the market overseas, and will be working closely with Shennong’s founders as the latter will maintain their 20 per cent stake in the company.
Ancom is a diversified group with businesses in agricultural chemicals, industrial chemicals, logistics, and polymer, amongst others.
It was established in 1969 as Ansul (Malaysia) Sdn Bhd as a pioneer manufacturer of agricultural chemicals in Malaysia, and has been listed on the Bursa Malaysia since 1990.
The group’s agricultural chemicals division is the sole manufacturer of active ingredients in Southeast Asia while its industrial chemical division is one of the only two key manufacturers of ethanol in Malaysia.