Megachem Limited
Annual Report
2014
37
EXTERNAL ENVIRONMENT
General consensus indicates softer but still positive global growth, bolstered by impetus from the US economy, lower
commodity prices especially oil and monetary easing from Euro zone, Japan and China. Uncertainty however lingers
on over the extent stimulus measures can help pull the Euro zone out of their current doldrums and whether it can
avert the risks arising from deflation in Japan. In addition the world will be concerned over how China manage a new
“normal” of slower growth.
Highly correlated to economic activity, the chemical industry is therefore expected to continue its positive trend
though materialization of the risks mentioned above can derail this trend.
MEGACHEM’S STRATEGY : A BALANCED APPROACH
Against an uncertain economic backdrop and taking into considerations the opportunities and risks the external
environment present, Megachem will adopt a balanced approach towards managing its business in 2015.
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Asia-centric focus
The importance of Asia to the specialty chemical industry cannot be underestimated. Asia’s large and growing
middle class increases Asia’s purchasing power and demands better housing, more consumer goods and
electronics, automotive and many others. The continuing industralisation of Asia has also seen the rise of the
manufacturing sector. This sector demands huge amounts of specialty chemicals to produce anything from
electronics to cosmetics and pharmaceuticals products both for use within Asia and for export.
Our extensive network in Asia put us in a good position to capitalize on the vast opportunities that this region
offers.
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Financial Discipline
Uncertainty over how long the current economic growth business cycle will continue calls for a measured
approach in managing our financial position. Megachem will thus strive to grow our business at a pace which is
comfortable within our financial capacity so that we will be in good shape to weather any unforeseen changes
in the external environment.
PROSPECTS
Given that economic outlook and conditions in the chemical industry are quite mixed, it is difficult to make any
predictions of our prospects for 2015. We are however confident that our resilient and sound business model will
deliver long term growth.
Our Prospects 2015
