To be Number One in the Global Halal Hub

There is more technical information about Welli-Multi Corporation (WMC) coming through the newswire these days.

Firstly, gelatin production for the next three years is targeted at 15,000 tonnes Secondly, some 25 billion gelatin capsules will also be produced in the same time-frame.

Overall funding required: RM450 million, of which RM300 million will be spent in the next 12 months for equipment and technology purchase.WMC will likely invest some RM200 million to acquire gelatin producing machinery and technology from Imtech Drygenic, for which the deal was agreed upon to last month. The subsequent expenditure of about RM100 million will be with India-based Erawat Engineering Pte Ltd from which WMC would purchase the equipment for the manufacture of gelatin capsules.

Time-line for commencement of production: early 2008. First year targets will be 5,000 tonnes of gelatin and five billion gelatin capsules for the halal market.

A further RM150 million is needed to boost production in the second and third year to achieve broad planning targets for the first three years. However, this additional investment is fully dependent on the actual performance of the business.

WMC will finance these new investments via borrowings and project financing.

The rationale for getting into this gelatin business-to cash into the global halal market for gelatin; as producers of such materials were few and far between with some gelatin producers using a mixture of pig skin to make the compound.

Gelatin, besides being used to produce foodstuff such as low-fat ice-cream and jelly, is also used in a wide array of pharmaceutical products, including collagen and cosmetics.

In this connexion,WMC has indicated that it also harbour plans to produce its own range of pharmaceutical products under its own brand name in future.

As for the gelatin capsules, the demand from government hospitals alone is about 3.2 billion pieces a year. So the threshold market is as good as achieved if they can secure this vital government sector .

On its expansion into the palm oil industry, WMC will step up its efforts in the palm kernel cake (PKC) business. Traditionally, PKC is used only as animal feed, but today there is potential use of it to produce activated carbon.

Of late, the prices of PKC have been rising significantly; from 32 sen per kg seven months ago to 52 sen per kg currently. This bodes well for WMC's bottom line for the year ending 2007.

Heartsong