KUALA LUMPUR: Ageson Bhd plans to source natural sand from Terengganu and Pahang to supply its China-based client Guangzhou Kaishengda Indsutrial Co Ltd (GKI).
"The sands to be supplied to GKI is from Malaysia," Ageson said, adding that it expects to source of the supply from Terengganu and Pahang.
The company told Bursa Malaysia today that wholly owned unit Esa Pile Sdn Bhd, which has secured the supply contract, has no sand mining operations of its own.
However, Ageson said it "believes that the group has the relevant expertise, capacity and capabilities by leveraging on several long-established business partners in sand business which has obtained approved permit for export of sands to overseas and experienced subcontractors in sand supply." "
"In addition, the company has engaged several experienced and competent subcontractors to undertake the sand supply to GKI, whereby Esa Pile will be relying on the technical expertise of the subcontractors team members that had experienced in dredging, channel deepening, desilting and declogging projects and sand washing operations in South East Asia region," it said.
Ageson on Monday announced that Esa Pile has secured a purchase order (PO) worth RM27.5bil over 15 years to supply river and sea sand to GKI.
The company today revealed more details on the announcement following a query by the stock exchange.
Under the deal, Ageson will supply 76.5 million tonnes of river sand and 153 million tonnes of sea sand every year to GKI.
Ageson said the purchase price of the sand was determined based on "willing buyer-willing seller" agreed price negotiated and agreed prior to the award of PO to Esa Pile.
"The company expects the supply of sands to GKI to contribute more than 25% or more of the net profits of Ageson and its subsidiarie’s net profit and/or result in a diversion of 25% or more of the group’s net assets for the financial year ending June 30, 2021," it said.