CMS subsidiary may raise RM21mil from land sale in Samalaju


KUCHING: Samalaju Industries Sdn Bhd (SISB) could expect a net gain of RM21mil from the sale of some 350 acres (142h) of land in Samalaju Industrial Park to Malaysian Phosphate Additives (Sarawak ) Sdn Bhd (MPA).

The land will be sold for RM25mil under a sale and purchase agreement sealed last week. MPA will, in addition, reimburse SISB — a wholly-owned subsidiary of Cahya Mata Sarawak Bhd (CMS) — RM34.4mil being the land premium and costs related to land alienation.

“The total sale consideration plus the cost of property amount to RM59.4mil, which is approximately RM170,000 per acre.

“This is lower than, but not inconsistent with, the average of approximately RM220,000 per acre for undeveloped industrial land in Bintulu area, being the nearest to Samalaju with industrial land transactions,” CMS said in response to queries from Bursa Malaysia on the proposed land sale.

The land, slated for the construction of an integrated phosphate project by MPA, is located in a green field industrial area that is right next to Samalaju Port that is currently being developed.

CMS said the land was originally ear- marked for a proposed joint venture (JV) aluminium smelter project between Rio Tinto Aluminium (Malaysia) Sdn Bhd (RTA) and SISB, which was aborted after the termination of heads of agreement between RTA and SISB in March 2012.

The state government later approved the application by SISB to retain the land for the phosphate project.

SISB will utilise the proceeds from the land disposal to finance its general office and administrative expenses and supplement its working capital for current and future business operations.

According to CMS, SISB would eventually own 40% equity interest in JV firm MPA, which other shareholders are Malaysian Phosphate Venture Sdn Bhd (40%) and Arif Enigma Sdn Bhd (20%).

The development cost of the integrated phosphate project has been revised upwards to RM1.04bil from the initial RM850mil due to increased capacity of phos- phoric acid, ammonia and fertilizer phosphate plant as feedstock to a proposed nitrogen-phosphorus-potassium plant to be built next to the phosphate complex, as well as raised capacity of coke plant to cater to captive use and for export market.

The proposed plant will be South-East Asia’s first integrated phosphate complex.

It is expected to have an annual production capacity of 500,000 tonnes of phosphate and related products.

Construction is expected to start in first quarter this year, and it would commence operation in phases beginning the first quarter of 2016.

Article type: metered
User Type: anonymous web
User Status:
Campaign ID: 1
Cxense type: free
User access status: 3
Join our Telegram channel to get our Evening Alerts and breaking news highlights
   

Stories You'll Enjoy


Vouchers