Dutch Lady sells PJ land to UEM Land for RM200m
11 Mar 2021
DutchLady Milk Industries Bhd has signed a conditional sale and purchase (SPA) agreement with UEM Land Bhd to sell its factory land in Petaling Jaya (PJ), Selangor, for RM200 million and relocate its manufacturing facilities to Bandar Enstek, Negri Sembilan.
This decision followed Dutch Lady’s board evaluation of bids received after the completion of a public tender conducted from September to December 2020.
The dairy company MD Tarang Gupta said the group will continue to manufacture from the existing PJ plant until its new facilities in Bandar Enstek are completed and fully operational, in three years or thereafter from now.
“Following the completion of the sale as per the SPA, Dutch Lady will rent the property from UEM Land, a wholly-owned subsidiary of UEM Sunrise Bhd, and continue operating from the property during the construction of the new facilities.
“This sale is a significant step in the company’s long-term strategic plan to support the government’s vision to position Malaysia as a regional halal food hub by migrating our manufacturing activities to a larger and more sophisticated plant,” Dutch Lady noted in a statement yesterday.
The company has been producing dairy products at the PJ plant since 1963. In March 2020, it announced the expansion of its manufacturing capabilities with the acquisition of 32.59 acres (13.19ha) of industrial land in Ban- dar Enstek halal technology park for RM56.79 million.
The utilisation of the proceeds from the sale of PJ land will be determined by Dutch Lady’s board by the end of 2021 and may include financing the construction of its new manufacturing facilities.
“We remain optimistic in our business outlook on the recovery of the nation’s enonomy and the overseas markets. Dutch Lady will continue adopting new strategies to ensure continuity and sustainability of the business to win in the market.
“This will help us continue catalysing growth, strengthening our position as the leading dairy company in Malaysia, keeping up with new consumer trends and ensuring agility in our supply chain,” said Tarang.
In a separate statement, UEM Sunrise CEO Sufian Abdullah said this SPA bodes well with its ongoing efforts to rebalance portfolio and increase foothold in the Klang Valley.
“With the land strategically located in PJ, its proximity to the central business districts and the education hub, the group wants to accommodate first-time home-buyers and young or small families.
“Also, customers who are looking for investment opportunities in targeting short- or long-term tenancies by young professionals and students in the various universities and colleges nearby,” he said.
UEM Sunrise is also on the lookout for strategic acquisitions, which can provide the company with a strong sales funnel for the next five years, as it takes vital steps to stay ahead when the economy recovers.
With the latest additions, UEM Sunrise’s total landbank stands at 11,092.8 acres, amounting to RM107.9 billion in gross development value.
Dutch Lady’s shares closed six sen or 0.17% higher at RM34.82 yesterday, giving it a market capitalisation of RM2.23 billion.
UEM Sunrise’s shares closed one sen or 2.13% lower at 46 sen, giving it a market capitalisation of RM2.3 billion.
Source: The Malaysian Reserve