KUALA LUMPUR: Kelington Group Bhd's 90.71 per cent-owned subsidiary Ace Gases Sdn Bhd has started production of liquid carbon dioxide (LCO2) at its second plant in Kerteh, Terengganu.
With a production capacity of 70,000 tonnes per year, this brings the company's production capacity of LCO2 to 120,000 tonnes per year.
Kelington chief executive officer Raymond Gan said the company's first ventured into LCO2 manufacturing with the commencement of the first plant, with production capacity of 50,000 tonnes per year, in Oct 2019.
"Having reached its full capacity, this expansion enables us to stay ahead of the growing market demand.
"Commencement of the second LCO2 plant will position us for further revenue growth from our industrial gas segment as we now have the capacity to effectively meet rising demand," he said in a statement.
According to Gan, the prospects of the company's LCO2 manufacturing business are promising, especially as the closure of petrochemical plants overseas due to environmental concerns have led to global shortage of LCO2, which is essential in many industrial processes.
He added that over 70 per cent of the company's LCO2 is currently exported, serving markets in Singapore, Australia, New Zealand, Fiji, Indonesia and the Philippines.
He said the enhanced capacity allows Kelington to further broaden its market footprint, both within these existing territories and into new regions.
At Kelington's LCO2 plant, CO2 waste gas sourced from Petronas Gas' processing plant is purified and converted into food-grade LCO2, catering for use across diverse applications, particularly in the food and beverage (F&B) sector to produce carbonated drinks and the creation of dry ice for food freezing.
In addition to the manufacturing facilities, Kelington said it has a robust support infrastructure, including storage tanks and a fleet of transportation vehicles.
The company noted that this facilitates the secure and efficient distribution of LCO2 both domestically and internationally.
Meanwhile, Kelington also said its strategic diversification into both engineering services and industrial gas manufacturing ensures a balanced portfolio for long-term sustainability.
While engineering services offer project-based revenue, the company said the industrial gas segment promises a steady, recurring income, enhancing the company's financial resilience and growth potential across various market conditions and sectors.
By balancing across both segments, the company said it is able to capitalise on opportunities across different market cycles and sectors.
Kelington's share price was up 0.37 per cent to RM2.72 a share as at 2.26pm.