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Chairman's Statement

Dear Shareholders,

During 2019, Hengyuan Refining Company Berhad (HRC or Company) continued the path set in 2017 and 2018, focusing on solidifying the business and putting the infrastructure in place for a long-term profitable future. All major projects made significant progress and the operating refinery achieved several operating records. The international refining environment was tough, but the Company has remained resilient and has emerged from the year stronger than ever. I would like to share some of HRC’s notable achievements during 2019.



When Malaysia Hengyuan International Limited (MHIL) took controlling ownership of the refinery three years ago in December 2016, there were two urgent requirements. The first was to ensure the refinery can produce petrol and diesel meeting future Malaysian fuel specifications. Next, was to revitalise the refinery major assets and equipment, given their age and maintenance history. Having addressed critical business continuity issues through the scheduled 2018 Major Turnaround and injected capital into upgrading assets and capabilities, in 2019 the Company could turn to optimising performance through Rejuvenation (focus areas that require continual strengthening and enhancement) and working on streamlining initiatives to increase efficiencies and reduce costs; while the Company continued to increase capabilities by executing key investment projects. All of these were covered under our six strategic pillars.