Kelington’s unit secures 10 years onsite industrial gases supply scheme

KUALA LUMPUR: Kelington Group Bhd’s indirect subsidiary, Ace Gases Marketing Sdn Bhd (AGMSB) has accepted a letter of intent (LOI) from one of the largest optoelectronics semiconductor companies in the world for an onsite industrial gases supply scheme over a period of 10 years.

In a filing with Bursa Malaysia, Kelington said a definitive agreement for the supply scheme would be executed in due course.

Under the LOI, AGMSB will set up onsite generators to produce nitrogen, hydrogen, and oxygen gases at the customer’s semiconductor manufacturing plant located at Kulim, Kedah.

Kelington said the cost of acquisition of components and construction would be funded through internally generated funds and additional bank borrowing.

“Subject to the signing of a definitive agreement, this supply scheme is expected to generate a cumulative revenue of approximately RM180mil for the group over a period of 10 years via monthly fixed facility fees and sales of gases,” it said, adding that the supply of the gases is expected to commence in the first quarter of 2023.