Ge-Shen says RM12.5 million land purchase in Kedah to boost manufacturing capacity
28 Jun 2023
Plastic injection moulding and metal stamping company Ge-Shen Corp Bhd said it is buying two parcels of industrial land in Sungai Petani, Kedah to expand its manufacturing facility.
This is in line with the corporate strategy of developing, expanding and growing the business operations of the group, it added.
“The acquisition of the property comes at an opportune time as the group is looking to scale up its presence in the northern region of Malaysia with more high technology manufacturing, especially for the medical sector,” Ge-Shen said in a filing with Bursa Malaysia on Wednesday (June 28).
The proposed acquisition adds manufacturing space of more than 200,000 sq ft, increasing the group’s overall manufacturing footprint by more than 35% to about 750,000 sq ft.
Ge-Shen noted that the property was originally occupied by a medical company and included in the property are fixtures and cleanrooms, which can possibly be utilised in the near future for Ge-Shen’s manufacturing of products for current and potential customers.
Ge-Shen said it did not carry out any formal valuation on the property.
“However, a valuation report will be done for financing purposes in due course. Notwithstanding the foregoing, the board of directors has compared the purchase price of the property (calculated on per square foot basis) with the current listing of factories for sale in the area where the property is situated, whereby (it is found that) the purchase consideration represents a discount of approximately 11.49%,” it added.
Ge-Shen, via its wholly-owned subsidiary Mercu Cahaya Sdn Bhd, had on June 26 entered into a sale and purchase agreement with Ommedical Sdn Bhd to purchase two pieces of land in Kedah for RM12.5 million.
One parcel of land measuring 8,903 sq m has a remaining lease period of 57 years expiring in September 2080, while the other measuring 10,147.5 sq m has 50 years of lease left, expiring in January 2074.
Barring any unforeseen circumstances, the proposed acquisition is expected to be completed by the first quarter of 2024.
At noon break on Wednesday, Ge-Shen shares closed down one sen or 0.68% at RM1.45, giving it a market capitalisation of RM160.29 million. A total of 211,000 shares were traded.
Source: The Edge Malaysia