KUALA LUMPUR (July 20): Agrochemical company Hextar Global Bhd is seeking to diversify its existing businesses to include trading of commodities, such as agriculture produce, energy resources, as well as metals and minerals, and precious metals.

Hextar said it may embark on viable ventures relating to the trading business through organic approaches or otherwise, including but not limited to, strategic businesses/investments, projects, joint ventures and/or mergers and acquisitions of suitable businesses/investments in the relevant industry.

It anticipates that the trading business will potentially contribute 25% or more to the group’s net profit and/or result in a diversion of 25% or more of its net assets.

In a bourse filing on Thursday (July 20), Hextar Global said it has been contemplating alternative businesses to diversify its source of revenue and profits, as well as to mitigate the risks of solely relying on its existing businesses, amid the challenging outlook for the group’s agriculture segment and following its exit from the consumer products segment in June this year.

For starters, the group had on July 3 announced that its 51%-owned subsidiary Hextar Fruits Sdn Bhd is buying into the business of trading of fruits, specifically durians, from PHG Ever Fresh Group Sdn Bhd for RM84 million.

Following this, Hextar Global said it has appointed PHG Ever Fresh Food (M) Sdn Bhd founder Datuk Lye Wee Ken, who is also the chairman of Pahang Durian Entrepreneur Association, and Hextar Chemical Sdn Bhd managing director of the agriculture segment Lo Ngen Loi to lead the new trading business.

"The proposed diversification is expected to contribute positively to the group’s financial performance and in turn, improve Hextar Global’s shareholders’ value," it added.

Nevertheless, the proposed diversification is subject to approval of shareholders at an extraordinary general meeting to be convened. M&A Securities Sdn Bhd has been appointed as the principal adviser for the proposed exercise.

Hextar shares closed up six sen or 8.11% at 80 sen on Thursday, giving it a market capitalisation of RM3.15 billion.