For chemicals veteran Sidney Chew, analysing the complex relationships between atoms, molecules and compounds is a life-long passion.

“Chemicals are essential in our everyday life. The heart of chemistry lies in studying changes in the properties and behaviour of the matter that makes up our world,” said the Co-Founder and Group Managing Director of SGX-listed chemical solutions provider Megachem Ltd.

“Chemicals is also a great teacher - I’m constantly learning about new molecules and compounds, as well as their applications, all of which can help my customers in the development and formulation of their products.”

Chew, who graduated from the University of Guelph in Ontario, Canada with a Bachelor of Science in Chemistry with Honours and a Bachelor of Arts with a major in Business Administration, has spent more than three decades of his career building Megachem into a one-stop specialty chemicals company. 

During these 33 years, the Group has weathered three major crises - the 1998 Asian Financial Crisis, the 2008 Global Financial Crisis, and the 2020 COVID-19 Crisis.

“Every crisis has tested our fundamentals, the stoutness of our business model, the competency of our people, and the effectiveness of our processes. Each crisis gave us an opportunity to review and address the gaps we had, to recalibrate our business model in order to stay relevant, as well as push ourselves continuously towards digitalisation,” Chew noted.

“At the end of the day, one lesson that stood out was this: A sound financial position is the best antidote for any and every crisis.”

With this goal in mind, Megachem took steps to boost its fundamentals even as COVID-19 exacted its toll on the global economy. 

“During the past year, we sharpened our focus on premium products by widening our product range in higher-growth sectors - specialty chemicals tend to command higher margins and its demand is also less price-sensitive,” Chew pointed out.

Megachem also adopted a more client-focused approach by helping its customers overcome some of the challenges that arose during the pandemic, including supply-chain disruptions and product shortages.

“Our diversified business model, in terms of our products, geography and market segments, has enabled us to remain resilient and sustainable amidst various economic cycles,” he added.

Decade of Opportunities

Established in 1988, Megachem listed on the then SGX Sesdaq board in 2003. It distributes over 1,000 different types and grades of specialty chemicals with a wide range of applications to an established and diversified base of more than 2,000 industrial customers, comprising mostly multinational companies. 

The Group serves a wide spectrum of industries, including water treatment, construction, oil and gas, food and beverage, fragrance, pharmaceuticals, polymers, coatings, electronics, rubber and plastics. It also provides integrated value-added services, such as contract manufacturing of specialty chemicals to meet specific customer requirements.

Megachem’s extensive distribution network spans Singapore, Malaysia, Indonesia, Thailand, the Philippines, Vietnam, Myanmar, China, India, the Middle East, Australia and the UK.

Looking ahead, Chew remains confident that this is the decade of opportunities, especially for Asia, despite the challenges created by the pandemic.

“We see Asia as the driver of our next phase of growth, on the back of a burgeoning middle class, the rollout of large infrastructure projects, and presence of high-growth industries,” he noted.

“There are many untapped market segments in Asia, such as infrastructure and construction, electronics, cleaning, nutraceuticals and pharmaceuticals. We believe our extensive footprint in the region and diversified industry coverage will provide us with the platform to take advantage of vast opportunities in this part of the world.”

Additionally, the contract manufacturing of specialty chemicals is expected to become another growth driver as customers increasingly streamline their operations to cut costs.

“In contract manufacturing, we add value by blending materials according to our customers’ formulations. Clients can outsource their non-core production to us, which allows them to reduce their capital spending and other expenses,” he said.

Megachem’s role as a one-stop solutions provider will also help its customers consolidate their supply sources and minimise the risk of supply disruptions, some of which were seen during the pandemic.

“These are some of the key pivots of our strategy to sustain and accelerate our business in the Group’s next phase of growth,” he added.

Future-Proof Operations

Despite bright prospects, risks remain. The resurgence in the number of COVID-19 infections and rise of new coronavirus variants, as well as recurring geopolitical tensions, may dent global growth in the months ahead, which in turn could impact the chemicals industry, Chew admitted.

“Nonetheless, our sales have remained quite steady, thanks to our highly diversified business model and stable customer base,” he said.

“Over the years, we’ve developed partnerships with a wide variety of customers, comprising largely multinational companies spread across a plethora of industries, which protects us against market volatility.”

Not surprisingly, Chew is constantly mulling ways to future-proof Megachem’s business model and beef up operational resilience.

“Similar to other corporate leaders, what keeps me awake are thoughts on business risks such as possible disruptors in the chemicals industry, as well as how to improve our operating model such that we will remain relevant for years to come,” he said. 

Megachem is equally focused on its Environmental, Social and Governance (ESG) strategy, Chew noted. The Group aims to achieve an uncompromised level of health and safety standards in its plants, products and processes. 

“Our plants are built to meet stringent health and safety regulatory requirements, and our processes are designed with features to reduce any health and safety risk. Our goal is to operate the plant safely with no leaks or incidents that may cause serious injury to our employees, contractors or neighbours,” he said.

At the same time, Megachem routinely prepares and practises its emergency response to potential incidents like a chemical spill or fire. If an incident does occur, it has procedures in place to mitigate the risk and reduce the impact on people and the environment.

Furthermore, as a distributor of chemicals, the Group plans to add more sustainable products to its product portfolio and introduce them to its customers, thereby contributing to the industry’s sustainability objectives, he added.

In the meantime, when Chew is not managing the day-to-day operations of the Group, he can be found outdoors, enjoying a long-distance run or walk. “This is one activity which gives me inspiration, and helps me think through the issues of the day,” he said with a laugh.

Another source of motivation for this 60-year-old includes inventors and entrepreneurs. 

“I look to them for insight as they have undertaken learning journeys and gained much from their failures and challenges. They have also enjoyed the experience of building something from nothing - we can all gather many life lessons from these individuals.”

Megachem Ltd

Established in 1988, Megachem is a one-stop specialty chemical solutions provider. The Group provides integrated value-added services, including distribution and contract manufacturing of specialty chemicals to meet customer requirements. Megachem distributes over 1,000 different types and grades of specialty chemicals, with a wide range of applications to an established and diversified base of more than 2,000 industrial customers, comprising mostly well-known multinational companies. The Group serves a wide spectrum of industries including water treatment, construction, oil and gas, food, beverage, flavours, fragrance, pharmaceuticals, polymers, coatings, electronics, rubber and plastics. Its extensive distribution network comprises Singapore, Malaysia, Indonesia, Thailand, the Philippines, Vietnam, Myanmar, China, India, the Middle East, Australia and the UK.

The company website is: www.megachem.com.sg

Click here for the company's StockFacts page.

For the six months ended 30 June 2021 financial results, click here.

About kopi-C: the Company brew

Text: Jennifer Tan-Stanisic
Photo: Company file

kopi-C is a regular column on the SGX Research website that features C-level executives of leading companies listed on Singapore Exchange. These interviews are profiles of senior management aimed at helping investors better understand the individuals who run these corporations.

For previous editions of kopi-C: the Company brew, please click here.  

For more information, or if you would like your senior executives to be featured on SGX Market Dialogues, please send suggestions to jennifer.t@sgx.com.