KUALA LUMPUR: Diversified group Emas Kiara Industries Bhd is banking on property development to grow its business.
The group, which had previously divested its geosynthetic manufacturing activities in 2011 to a global geosynthetic manufacturing group, said it was positive that its venture into the property sector would do well.
“We do not have a track record in property development, but we see the prospects. We are still exploring ideas,” said deputy executive chairman Roger Wong after Emas Kiara’s AGM and EGM here yesterday.
The group expects to complete a corporate exercise involving the RM45mil acquisition of MB Max Sdn Bhd for the Pinnacle Tower development project in Johor Baru city centre within the next three months. This has a profit guarantee of RM51mil.
During the EGM, a majority of shareholders agreed on the resolutions to dispose of wholly-owned subsidiaries Noblecorp Lands Sdn Bhd (which includes 80 acres in Kota Kinabalu Industrial Park) for RM38mil and Emas Kiara Sdn Bhd, consisting of land and a warehouse in Rawang, for over RM9mil.
According to Wong, the fund-raising exercise would enable the group to buy MB Max and settle internal loans.
Scheduled for completion in 2017, the project with gross development value of RM260mil, comprises 273 units of high-end serviced apartments.
Despite the slowdown in the Johor property market as well as the goods and services tax, Wong said the group was confident of selling all its units at the Pinnacle Tower. To date, almost 30% of units were sold.
Wong said the move into property development was a strategic move, which would take the lead in the next two to three years.
“This will build the group’s talent pool of highly-trained engineers and systems experts, with vast skill in construction. The projects shall incorporate the principles, values of green technology and environmental sustainability,” he said.
Wong expects the energy efficient lighting solutions segment, which distributes lighting products, to sustain its growth this year.
The group’s LED lighting related sales jumped 271% to RM9.15mil for the financial year 2014 from RM2.46mil a year ago, driven by government contracts secured for street lighting in the Klang Valley.
The bulk of the contracts secured, among others, include the supply of LED lights along Jalan Mahameru, worth RM3.8mil, where Emas Kiara were subcontractors.
“We are positive on the outlook of the segment, as we are looking to secure more contracts with the local councils.
“With the 11th Malaysia Plan in place and focus on green energy, we are exploring the maintenance aspects of street lighting,” he added.