Kelington Group to double capacity at second CO2 gas recovery plant

Kelington Group to double capacity at second CO2 gas recovery plant

Kelington Group subsidiary Ace Gases is to build a second carbon dioxide (CO2) gas recovery plant at Kerteh, Terengganu as part of a RMB45 million investment which will double production capacity.

The P2 will be constructed and installed at the existing Kerteh site (P1) to provide beverage grade LCO2.

The construction of an additional 70,000 tonnes per year of liquid CO2 manufacturing facilities will start in December, and expected to be completed by December 2023.

The Industrial Gases division continued its upward performance in Q3 with higher production output as the group penetrated into new geographical regions, namely Oceania countries for the sale of liquid CO2. As a result, revenue increased almost three-fold to RM20.5 million, as compared to RM7.5 million in the corresponding quarter in 2021.

In line with strong revenue performance, gross profit grew 99% year-on-year to RM40.7 million compared to RM20.4 million a year earlier. Gross margin was lower at 11.1% versus 19.2% due to the change in revenue mix driven by higher contribution from the General Contracting segment.

In the first nine months, revenue from the Industrial Gases division rose 75% year-on-year to RM42 million, again mainly driven by higher sales of liquid CO2 and other gases. Revenue contribution was led by Malaysia (47%) followed by Singapore (34%), China (15%), and Taiwan (3%).

In addition, it clinched another two contracts totalling approximately RM262 million from Malaysia and China in early November.

The first involves turnkey design and build services of a bulk liquid terminal in Port Klang, Malaysia, and the second concerns the material supply and installation of bulk gas delivery system for a semiconductor plant in Beijing.

Prospects at the Industrial Gases division remain positive as demand for LCO2 increases in tandem with the recovery in economic activities.

The start of its second onsite gas supply scheme in Q3 2023 to supply hydrogen, nitrogen and oxygen for an optoelectronics semiconductor giant in Kulim, Kedah will contribute positively to earnings over the next ten years.

Kelington Group provides supply and distribution services via Ace Gases Group and Cryotech Logistics to customers from various industry sectors. Its Industrial Gases supply range from onsite gas supply, liquid CO2 and dry ice, to electronics special gases and liquefied industrial gases.

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