Dialog Invests RM374.8 million in Gebeng Plant for Specialty Chemicals

Dialog Group Bhd, through its wholly owned subsidiary, Dialog Malic Sdn Bhd, is set to construct, own, and operate a state-of-the-art speciality chemical plant in Gebeng, Kuantan, Pahang. This strategic move signifies Dialog's initial venture into the production of specialty chemicals, marking a significant expansion of its business portfolio.

The plant will be strategically situated within the integrated chemical site currently managed by BASF Petronas Chemicals Sdn Bhd, enhancing synergies within the chemical industry in the region.

Malic acid, the primary product of this facility, is classified as a specialty chemical and plays a pivotal role in the food and beverage (F&B) sector, where it serves as a crucial food additive. The F&B industry's consistent demand for malic acid underscores its importance and market stability.

Dialog is taking on the responsibilities of engineering, procurement, construction, and commissioning (EPCC) for the malic acid plant. The facility is designed to have an impressive annual production capacity of around 12,000 metric tonnes, and the investment commitment is estimated at approximately US$80 million. Dialog's strategic decision to establish a malic acid plant in Malaysia aligns with its ambition to not only cater to the burgeoning Southeast Asian market but also tap into the global demand for malic acid, which continues to grow.

The company stated, "This malic acid plant in Kuantan will supply the required malic acid to major customers and distributors in Malaysia and overseas. The feedstock for the production of malic acid will be supplied by local suppliers." This approach emphasizes Dialog's commitment to sourcing raw materials locally, supporting domestic suppliers, and contributing to the regional economy.

Beyond its primary objectives of enhancing its product portfolio and addressing market demands, this project holds promise for socio-economic development in the East Coast Economic Region (ECER). By creating job opportunities for local residents during both the construction and operational phases, Dialog aims to stimulate economic growth and positively impact the surrounding communities. The EPCC phase of the project is anticipated to conclude in the second quarter of 2026.

Dialog is well-prepared to fund its portion of the project's investment and working capital through a combination of internally generated funds and/or bank borrowings, potentially including proceeds from sukuk issuance.

Dialog Group's bold entry into the specialty chemical industry with malic acid plant signifies a strategic expansion of its business operations. This investment not only caters to the consistent demand for malic acid in the F&B sector but also positions Dialog to tap into global opportunities. Moreover, the project promises to contribute to the socio-economic development of the East Coast Economic Region (ECER) and the local community. With the EPCC phase set to conclude in 2026, Dialog is poised to further strengthen its position in the chemical industry.