CCM to sell minority stake in Impax

A 7.6% stake in USA-based Impax Laboratories, which it acquired in 1997, is among the non-core assets that Chemical Company of Malaysia (CCM) plans to sell off as it looks to buy new businesses in the drug sector, according to a report in the Malay Mail newspaper. Impax is not providing the Malaysian group with enough of a return for its investment, it was noted, with analysts telling the newspaper that CCM hopes to boost revenue to 2.0 billion ringgit ($540.8 million) by 2007. For the year ended December 31, 2005, CCM had net sales of 814.2 million ringgit.

The Malaysian News Agency, Bernama, has quoted the company's managing director, Mohamad Hashim Tajudin, as saying that CCM expects to double its sales in the current financial year, partially as a result of its recently-acquired majority holding in Duopharma Biotec. That company had sales of 94.3 million ringgit last year, with a net profit margin of about 35%.

Because of its cash/debt position after the Duopharma purchase, any new acquisitions will likely occur after CCM gets value from its non-core assets, the analysts told the Malay Mail.