Berjaya Property is venturing into the automotive tyre manufacturing industry through a RM1.3 billion joint venture with China’s Wanli Tire Co., Ltd., marking the property developer’s diversification into industrial manufacturing.
The company announced that its wholly owned subsidiary, Alam Baiduri Sdn Bhd (ABSB), has entered into a joint venture agreement with Hong Kong-incorporated Trusmax Investment Co., Limited, a wholly owned subsidiary of Wanli Tire, to establish a new company to develop an automotive tyre manufacturing business in Malaysia.
The venture will cover the research, development, design, manufacture and sale of automotive tyres and related components, as well as after-sales services.
Under the agreement, Trusmax will hold a 70% stake in the joint venture company through a total capital contribution of RM569.34 million, while ABSB will own the remaining 30% with a total contribution valued at RM244.01 million.
Berjaya Property’s contribution comprises RM125.70 million in cash and a 67.9-acre parcel of freehold land in Ulu Selangor valued at RM118.31 million. The land forms part of a larger 372.55-acre agricultural estate currently planted with oil palm.
The capital contributions will be injected over two years.
The total investment required for the project is estimated at RM1.30 billion, with RM813.35 million, or 63%, to be funded through shareholders’ equity while the remaining RM491.45 million will be financed through borrowings.
Berjaya Property said its cash contribution, together with an estimated RM60 million required for land conversion, subdivision and infrastructure works, will be funded through a combination of internal funds and borrowings.
The group said the joint venture would allow it to diversify into automotive tyre manufacturing by leveraging Wanli Tire’s technical expertise, manufacturing capabilities and industry experience.
Wanli Tire, established in China in 2004, is a state-owned enterprise under Guangzhou Industrial Investment Holding Group Co., Ltd. The company specialises in tyre research and development, manufacturing, sales and servicing, and operates a national enterprise technology centre in China.
The proposed manufacturing facility is expected to strengthen Malaysia’s position as a regional automotive components manufacturing hub while creating a new industrial use for Berjaya Property’s landbank.
The announcement did not disclose the expected production capacity, construction timeline or commencement date for the tyre manufacturing plant.
