Johore Tin Berhad (“JTB” or the “Group”), through its wholly-owned subsidiaries Able Dairies Sdn. Bhd. (“ADSB”), Unican Industries Sdn. Bhd. (“UISB”) and Able Development Sdn Bhd (“ADS”) (“collectively referred to as the “Purchasers”), today entered into a conditional sale and purchase agreement (“SPA”) with PNB Development Sdn Bhd (“PDSB” or the “Vendor”) to acquire a piece of freehold land measuring approximately 297.51 acres located at Mukim Bandar, Daerah Kuala Langat, Selangor for a total cash consideration of approximately RM169.8 million. (“purchase consideration”) (“proposed land acquisition”)
Following that, the Group proposes to undertake a diversification of its existing businesses to include property development. (“proposed diversification”)
The proposed land acquisition will be undertaken to restructure and expand its manufacturing operations and to undertake property development activities. The purchase consideration is proposed to be funded via internally generated funds and bank borrowings. As of 31 March 2021, JTB Group has a cash and bank balances of RM102.4 million.
JTB is principally involved in the manufacturing and trading of various tins, cans, and other containers and the production of milk and other dairy products. Thus, the proposed land acquisition allows the Group to expand its income base via venturing into property development activities.
The management of JTB expressed: “The proposed diversification allows the Group to expand its income base to include property development activities. As and when the Group’s proposed development of the Land materialises, it should provide the Group with an additional source of the revenue and earnings and reduce its dependence on the existing businesses.”
“In line with the Board’s plans to expand and grow its operations, JTB will also utilise a portion of the land to expand its manufacturing operations as well. The portion of the land assigned for the existing business is sizeable and allows the Group to restructure and expand its operations in the central region of Peninsular Malaysia as we have 4 factories and warehouses in the area of Teluk Panglima Garang, Selangor.”
At this juncture, the Group has yet to decide on the plans for its property development business, which may include, amongst others, entering into a joint-venture arrangement for the development of the land.