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Shareholders' Agreement with Diyou PCR Sdn. Bhd.

DIALOG Group Berhad (“DIALOG”) is pleased to announce that its wholly owned subsidiary, Dialog Chemicals Sdn. Bhd. (“DCSB”) has on 11 November 2021, entered into a Shareholders’ Agreement (“SHA”) with Diyou PCR Sdn. Bhd. (“DPSB”) to form a special purpose vehicle (“SPV”) to build, own and operate a food grade recycled polyethylene terephthalate (“recycled PET”) pellets production facility (“Facility”) using recycled PET flakes as raw material to produce food grade recycled PET pellets for sale. SPV will sell food grade recycled PET to food & beverages customers. This proposed venture into the post-consumer plastics recycling industry would be DIALOG’s first investment into the downstream petrochemicals and renewable business.

The SHA is pursuant to the Memorandum of Understanding announced on 11 August 2021.

DPSB is a wholly owned subsidiary company of Diyou Fibre (M) Sdn. Bhd. (“DFMSB”) which is an established recycling and manufacturing company in Malaysia, based in Nilai, Negeri Sembilan. The founders have more than 30 years of experience in the post-consumer plastics recycling industry.  DFMSB is one of the largest mechanical recycling manufacturer, where post-consumer plastics are recycled and made into materials used for polyester staple fibre, food and beverage packaging, industrial packing, construction, automotive and other raw materials in various industries.

The proposed venture will serve to meet the increasing demand for food grade recycled PET materials resulting from the drive by the international community to support a circular economy.

The recycling of plastic wastes into feedstocks for the production of packaging materials for the food and beverage industry undertaken by this SPV further supports DIALOG’s initiatives and contribution towards making a positive impact towards the environment, as well as supports the Malaysian government’s initiatives in sustainability as stated in the circular economy road map.

DIALOG has set a long term climate goal with the aspiration to achieve Net Zero Carbon emission by 2050. The proposed venture will be in line with that goal and is a continuation of the initiatives by DIALOG to achieve business sustainability and to fulfill its Environmental, Social and Governance agenda through commercially viable ventures. Currently, DIALOG has invested in a startup company which has developed, and continues to develop proprietary technology to capture carbon and utilize the carbon in the production of fuels and chemicals which will result in the reduction of greenhouse gas emissions.

DIALOG remains committed to its core values and key strategies of a sustainable business by capturing opportunities and mitigating risks through its diversified portfolio.

Please refer to the attachment for further details of the announcement.

This announcement is dated 11 November 2021.

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