Ancom Nylex strengthens market presence with Helm AG partnership and private placement

SHAH ALAM - A leading integrated chemical group in Southeast Asia, Ancom Nylex Berhad has taken a significant step to solidify its market presence by announcing a proposed private placement of up to 10 per cent of its issued ordinary shares.

The initiative included a conditional placement agreement with Hamburg-based chemical marketing firm Helm AG, with an issue price set at RM1.00 per share.

Through this placement, Helm AG is set to acquire a 9.47 per cent equity stake in Ancom Nylex, bolstering its presence in the agricultural machinery sector.

Helm AG viewed this collaboration as a powerful partnership, leveraging both companies' strengths in market reach and product innovation.

Together, they aim to enhance profitability while driving impactful and sustainable solutions for the environment.

Helm AG's chief executive officer (CEO) Stephan Schnabel highlighted the value of the collaboration, noting that the diverse cultural perspectives of both companies would help in developing eco-friendly products.

“We see ourselves as architects, focused on building a strong foundation for sustainable growth and profitability, which is a key driver for both companies,” he said during a live Zoom discussion on Monday.

The agreement, formalised on Sept 23, positioned Helm AG as a major shareholder in Ancom Nylex.

The placement is expected to generate approximately RM96.2 million, with RM56 million allocated for repaying borrowings, RM39.2 million for general working purposes, and RM1 million for placement-related expenses.

Schnabel also pointed out the environmental focus of the partnership, citing the development of innovative solutions like methanol as an alternative fuel for the marine industry.

“This collaboration provides a significant opportunity to create lasting positive impacts,” he added.

Meanwhile, Ancom Nylex executive vice chairman Datuk Siew Ka Wei emphasised Helm AG’s commitment to innovation and high corporate governance standards.

“Helm is the ideal long-term partner. Their involvement benefits all shareholders, and this partnership will unlock new growth and innovation opportunities,” Siew said.

Siew further noted that the collaboration with Helm began in 2005, leading to their first contract in 2007.

He described the partnership as a combination of complementary strengths in market coverage and product offerings, where “one plus one equals much more than two.”

In a related matter, Ancom Nylex Managing Director and Group CEO Lee Cheun Wei expressed confidence that the collaboration would enhance efficiency and productivity, leading to increased revenue over the next two years.

He stressed the complementary nature of the companies’ strengths, with Ancom Nylex focusing on post-emergence solutions and Helm AG specialising in pre-planting and burn-down products, particularly in key markets like the US and Brazil.

“Therefore, our offerings do not overlap; rather, they are complementary, enabling us to combine our forces for a better overall solution in the market,” Lee added during discussions yesterday.

Lee also highlighted Helm AG’s established presence in Europe, a region where Ancom Nylex has had limited activity.

With the new partnership, they planned to leverage Helm’s extensive market reach to strengthen their performance in the European market.

The placement is expected to be finalised by the fourth quarter of 2024, barring any unforeseen circumstances.

This strategic investment aims to boost Ancom Nylex’s market presence, increase shareholder value, and set the foundation for a sustainable future in the chemicals industry.

Founded in 1900, Helm AG is a globally recognised independent chemical marketing and distribution company, with a footprint in over 30 countries and generating revenue of €5.9 billion in 2023.

This partnership is anticipated to enhance Ancom Nylex's financial position and operational capabilities in the agricultural and industrial chemicals sectors.