Hap Seng eyes new assets amid slowdown


KUALA LUMPUR: Hap Seng Consolidated Bhd, a diversified group with businesses in property, palm oil and building materials, is taking advantage of the slowdown in the economy to hunt for new assets.

Managing director Datuk Edward Lee Ming Foo said the group is open for merger and acquisition (M&A) deals and is looking to purchase more land for its property development projects.

“Since growing the company organically will take time, our strategy is to look out for more M&A opportunities and acquire land.

“And this will be in the areas of our three business pillars, which are plantations, building materials and property development,” said Lee when met after Hap Seng’s 40th AGM and EGM yesterday.

At the EGM, shareholders approved the resolutions to acquire Malaysian Mosaics Sdn Bhd for RM380mil from Gek Poh (Holdings) Sdn Bhd and divest Hap Seng Commercial Vehicle Sdn Bhd (HSCV) for RM750mil. “The disposal of HSCV and the purchase of Malaysian Mosaics is timely for the company, as it fulfils our vision in owning an integrated building material business,” he noted.

In March, Hap Seng had announced the disposal of HSCV for a total of RM750mil to finance the acquisition of Malaysian Mosaics.

Lee said while contributions from the building material business was immediate, it intended to grow it even further since the potential was huge in the long term.

For 2016, the building material segment’s contributions would be RM30mil, he revealed. On whether there would be more asset purchases this year, his reply was “only if there are attractive prices on the table will we evaluate it in terms of profit the firm can bring in”.

Meanwhile, on the crude palm oil price expectations, Lee projects this would be in the range of RM2,800 to RM3,000 per tonne.

In terms of fresh fruit bunches (FFB), he said its FFB was affected and was seeing about a 20% drop in the first quarter.

“Our plantation division is expectated to face a tough year, with performance impacted by global macroeconomic factors including the palm oil market, weather conditions in major oil seed-producing countries and seasonal cropping patterns of FFB,” he added.

The group’s property development unbillled sales now stood at RM750mil.

Property launches in 2016 include the RM1bil gross development value (GDV) Aria Luxury Residences located along Jalan Tun Razak, Kuala Lumpur, and the Balakong residential and commercial development with a GDV of RM900mil.

The Aria’s grand launch is slated for the third quarter of this year, while the Balakong project is still in the planning stages.

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