BioNexus Gene Lab Corp Announces New Business Developments for Subsidiary Chemrex with Investment in High-Quality Color Paste Production

Rhea-AI Summary

BioNexus Gene Lab Corp (Nasdaq: BGLC) announces a significant business development for its subsidiary, Chemrex The company has invested approximately RM 2 million (USD $450,000) to begin production of high-quality color paste for composite industrial customers. The new production facility will start operations in late September 2024.

This strategic move is expected to bring several benefits:

• Increased profit margins through in-house production
• Improved quality control
• Faster delivery times
• Competitive pricing enabling market expansion

Chemrex aims to capitalize on growing demand for composite materials in various industries across Southeast Asia, the Middle East, Australia, and New Zealand.

Positive

• Investment of RM 2 million (USD $450,000) in new color paste production facility
• Expected increase in profit margins through in-house production
• Improved quality control and faster delivery times
• Potential for market expansion in Southeast Asia, Middle East, Australia, and New Zealand
• Alignment with company's long-term growth and innovation strategy

Negative

• None.

Insights

Financial Analyst

This investment in color paste production marks a strategic move for BioNexus Gene Lab Corp's subsidiary, Chemrex. The RM 2 million (USD $450,000) investment, while modest, could yield significant returns. By bringing production in-house, Chemrex is poised to improve its profit margins and gain better control over its supply chain.

The focus on high-quality composite materials aligns with growing industrial demands, particularly in construction and manufacturing. This vertical integration strategy should enhance Chemrex's competitive position, potentially leading to increased market share and improved financial performance. However, investors should monitor the execution of this new production line and its impact on the company's financials in the coming quarters.

Market Research Analyst

Chemrex's expansion into color paste production is a calculated move to tap into the burgeoning composite materials market. The global composites market is projected to grow at a CAGR of 6.6% from 2021 to 2028, driven by demand in construction, automotive and aerospace industries. By targeting Southeast Asia, the Middle East, Australia and New Zealand, Chemrex is positioning itself in high-growth regions.

The ability to offer competitive pricing through in-house production could be a game-changer, potentially disrupting existing market dynamics. However, success will depend on Chemrex's ability to meet quality standards consistently and navigate regional regulatory landscapes. Investors should watch for indicators of market penetration and customer acquisition in these target regions.

KUALA LUMPUR, Malaysia, Sept. 11, 2024 (GLOBE NEWSWIRE) -- BioNexus Gene Lab Corp (Nasdaq: BGLC, the “Company”), an emerging Biotech & Chemicals company, is pleased to announce that its subsidiary, Chemrex Corporation Sdn. Bhd. (Chemrex), has invested approximately RM 2 million (approx. USD $450,000) to begin the production of fine-quality color paste (non-drying type) specifically designed for composite industrial customers. The new production facility will commence operations in late September 2024, marking a significant milestone for the Company as it seeks to expand its portfolio and enhance its market presence globally.

The investment and the launch of this new product line will allow Chemrex to capitalize on the growing demand for high-quality composite materials in various industries. The move is set to bring several key advantages that align with the Company’s long-term strategy for growth and innovation.

Key Benefits of the New Business:

1. Increased Profit Margins:
   The new color paste production will significantly improve Chemrex's profitability. By controlling production internally, Chemrex will capture greater margins compared to outsourcing these materials. This efficiency ensures stronger financial performance in the near and long term.
2. Improved Quality Control:
   By producing the color paste in-house, Chemrex can exercise strict oversight over product quality. This will ensure that customers receive superior products that meet the highest standards, reinforcing Chemrex's reputation for reliability and excellence.
3. Timely Delivery of Finished Products:
   In today's fast-paced industrial environment, timely delivery is crucial. Chemrex’s ability to produce the color paste within its own facilities will enable faster turnaround times and better service for its clients, solidifying long-term partnerships and fostering customer satisfaction.
4. Competitive Pricing and Market Expansion:
   With in-house production, Chemrex will gain a significant cost advantage, allowing it to offer competitive pricing. This strategic positioning will help the Company penetrate new markets across Southeast Asia, the Middle East, Australia, and New Zealand, all regions experiencing high demand for composite materials in construction, automotive, and manufacturing sectors.

Future Expansion Plans:

As part of Chemrex's forward-looking strategy, the company has laid out plans to establish additional production facilities in the Middle East and Vietnam. This expansion will position Chemrex closer to key markets, enhancing its ability to respond to regional demand efficiently and cost-effectively. These new factories will replicate the successful production model being rolled out in Malaysia.

Synergy Through Bulk Purchasing:

Chemrex will also leverage bulk purchasing of raw materials to drive synergy effects. By acquiring materials in larger volumes, the Company will benefit from economies of scale, leading to lower production costs. This not only strengthens Chemrex's competitive position in the composite materials industry but also enables it to develop and supply raw materials to various other industries, creating new revenue streams.

Sam Tan, CEO of BioNexus Gene Lab Corp, commented:
"This new business development underscores Chemrex’s commitment to quality, innovation, and market leadership. By investing in color paste production and expanding our reach globally, we are well-positioned to capitalize on emerging opportunities and deliver superior value to our customers and shareholders alike."

About BioNexus Gene Lab Corp:

BioNexus Gene Lab Corp (BGLC) is a biotechnology company focused on providing innovative solutions in the healthcare and industrial sectors. Through its subsidiaries, the company is engaged in the development and production of high-quality materials and healthcare solutions for customers worldwide.

For more information, please visit www.chemrex.com.my.

Investor Relations

BioNexus Gene Lab Corporation

Email: ir@bionexusgenelab.com

FAQ

What is BioNexus Gene Lab Corp's (BGLC) latest investment?

BGLC has invested approximately RM 2 million (USD $450,000) to begin production of high-quality color paste for composite industrial customers through its subsidiary, Chemrex

When will BGLC's new color paste production facility start operations?

The new production facility is scheduled to commence operations in late September 2024.

What are the expected benefits of BGLC's new color paste production?

The expected benefits include increased profit margins, improved quality control, faster delivery times, and competitive pricing enabling market expansion.

Which markets is BGLC targeting with its new color paste production?

BGLC is targeting markets in Southeast Asia, the Middle East, Australia, and New Zealand, where there is high demand for composite materials in construction, automotive, and manufacturing sectors.