Hong Seng to set up logistics services for KRC NBL project

KUALA LUMPUR: Hong Seng Consolidated Bhd is subleasing a tract of land in Prai Bulk Cargo Terminal, Pulau Pinang, to construct a tank farm and provide integrated logistics services to wholly owned subsidiary Hong Seng Industries Sdn Bhd as well as other nitrile butadiene latex (NBL) manufacturers.

It said in a filing with Bursa Malaysia its wholly owned subsidiary HS Petchem Logistics Sdn Bhd had accepted a letter of offer issued by Penang Port Sdn Bhd to sub-lease 12,140 sqm of industrial land for a period of 20 years, for a rental payment of RM8.53mil.

This comes following Hong Seng Industries' plan to build and operate a nitrile butadiene latex (NBL) manufacturing plant with a planned capacity of up to 960 kilo-tonnes per annum in Kedah Rubber City.

NBL is the raw material used to produce nitrile gloves, which will go towards facilitating Hong Seng's glove manufacturing business in Sungai Petani, Kedah.

"HS Petchem can fulfil the needs of HS Industries to store feedstocks for its NBL production and is expected to create costs efficiencies for the Group," said Hong Seng.

"There is also potential for HS Petchem in securing other NBL manufacturers as its customers for the feedstock, which will increase the business profitability in the longer run and thus, reduce its sole reliance on HS Industries for income," it added.