Asia Poly buys 30pct stake in GB Plas
18 Nov 2020
Asia Poly Holdings Bhd (APH) today signed a head of agreement (HoA) with GB Plas Sdn Bhd (GPSB) managing director Gooi Chin Hooi to acquire 30 per cent stake for RM15 million.
Gooi is the largest shareholder in GPSB with a 65 per cent stake, followed by Ng Kar Hung with 25 per cent, and Gooi Wen Xin and Gooi Wen Ning each holding five per cent, according to a filing with Suruhanjaya Syarikat Malaysia.
Both parties will conduct a due diligence in regards to the acquisition, and the exercise is expected to be completed by the first quarter of 2021.
APH executive chairman Datuk Yeo Boon Leong said through this acquisition, the company would be able to strengthen each other’s presence in their respective key markets such as Southeast Asia where GPSB is active in, and the US and Europe markets where APH has tapped into further.
“The synergistic relationship between these two companies will also be explored in regard to R&D for the usage of acrylic sheets and plastic sheets in other applications, such as solar panels.
“Furthermore, given that APH’s production lines are currently running at full capacity, the acquisition shall provide an immediate expansion opportunity as GPSB’s plant is currently running at a utilisation rate of between 50-60 per cent.
“This boosts our initial plan of doubling up our production capacity to 1,600 tonnes per month by September 2021,” he said in a statement.
APH is an ACE Market-listed company primarily involved in the manufacturing of cast acrylic sheets while GPSB, established in 2003, is one of the world’s leading manufacturers and exporters of extruded acrylic as well as plastic sheets.
The company offers a complete raw material production facility from virgin resin through manufacturing processes to extrude high-quality products.
GPSB is currently exporting to over 66 countries across Asia, Europe, Africa, as well as North and South America.
In 2010, GPSB possessed the largest extrusion facility in Southeast Asia.
The company has a total of 10 production lines.
For the financial years ended December 31 2019 (FY19) and FY18, GPSB registered a revenue of RM52.2 million and RM65.8 million respectively.
APH said GPSB would become an associate of APH upon completion of the acquisition.
The acquisition will be funded via internally generated funds.
It is expected to contribute positively to the earnings of APH for FY21 onwards.
“We see a rising demand for extruded acrylic and plastic sheets in Asia, the US and European markets.
“In fact, we are anticipating a large long-term contract from a US customer which is currently in its advanced stage of discussion,” Gooi said.
On the proposed acquisition by APH, Gooi said GPSB would be able to tap into these markets even more efficiently through the market channels provided by APH.
“Just like cast acrylic sheets, we have seen a sharp spike in orders from new customers this year, thus it is important that we capture these market opportunities by having a larger combined presence through this corporate exercise,” he said.
APH is the only listed Malaysian manufacturer of cast acrylic sheets.
Cast acrylic sheets are used widely in sanitary wares, signage and displays, architectural designs, interior design, automotive and transportation, and other applications.
Other applications include food, medical, industrial equipment, and sports.
In its latest financial result, APH registered a revenue of RM30.12 million for the third quarter (3Q) ended September 30, 2020, 49.05 per cent higher than RM20.21 million in the same quarter last year, largely due to the soaring demand of cast acrylic sheets in local and export markets.
It posted a net profit of RM4.09 million for the quarter, compared to a net loss of RM2.13 million posted same period last year.
The US and and European market contribution increased more than seven times in the first nine months of financial year 2020 compared to the same period last year.
This has led to an extraordinary third quarter result which brought the group’s nine-month revenue and net profit to RM57.29 million and RM4.70 million respectively compared to a revenue of RM54.64 million and RM6.64 million net loss.
Source: NST Posted on : 18 November 2020