OUR STRATEGY (CHemical)+Re(Action)2: for- Gr{OW}th The Megachem formula for growth is a reaction of 3 key strategies creating a chemistry that will elevate us to a different level of growth. We develop our strategies around the key pillars of geographic network, product offerings and industry coverage. Combine these with our supply chain infrastructure and close relationships with customers and suppliers, Megachem will be well positioned to grow its business, thereby enhancing value for our shareholders. GLOBAL ECONOMY 2025 was marked by rise in trade barriers, shifts in global trade and geopolitical risks. While economic uncertainties rose amid tariff-driven headwinds, global economy turned out to be relatively resilient. Going into 2026, many have predicted that the positive momentum can be sustained, backed by lower interest rate environment and on-going monetary and fiscal stimulus. However continued growth may be derailed if: • lower interest rates result in higher inflation again; • the effect of trade barriers persists; • fragile job market leads to recession fear; • over-valuation of AI companies leads to an AI bubble bursts; • geopolitical risk escalates further. CHEMICAL INDUSTRY 2026 will be another challenging year for the chemical industry if the current oversupply and trade complexities do not ease. If conditions do not improve, prices may remain soft and growth is likely to be modest. MEGACHEM As for Megachem, our current strategy of building a resilient business model with a customer and Asia-centric focus will remain relevant as we seek to accelerate our long-term growth. We will respond to any adverse external factors with operational and financial discipline even as we work towards deepening our coverage across various market segments. REBUILDING OUR WAREHOUSE On 5 July 2023, Megachem informed shareholders via an SGX announcement that a fire broke out on the same day at 132 Pioneer Road where one of our warehouses is located. After the fire, we decided to rebuild the warehouse with an expanded warehousing capacity, capable of storing about 60-80% of our current warehousing requirement and with higher level of safety standards. The reconstruction is nearing completion and we are seeking regulatory clearance for the issuance of the Temporary Occupational Permit. Barring unforeseen circumstances, we hope our new warehouse can be fully operational by end of March 2026. The cost of construction is estimated to be in the region of S$18 million. This new warehouse supports our strategy of positioning ourselves as a one-stop solutions provider. It is purpose-built to handle multiple classes of chemicals, allowing us to serve the diverse needs of our customers more effectively. With its increased capacity, the facility will reduce our reliance on third-party storage and lower overall warehousing costs. It also underscores our strong commitment to safety, environmental responsibility, and regulatory compliance. Over the long term, it is expected to strengthen our operational efficiency and enhance our competitiveness. MEGACHEM LIMITED ANNUAL REPORT 2025 08 OUR PROSPECTS & STRATEGY
RkJQdWJsaXNoZXIy NTM2MDQ5