Tatt Giap Group Bhd plans to develop a RM140mil light industrial project in Valdor Industrial Estate in Sungai Bakap soon.
Group chairman Datuk Thomas Liang told StarBiz after the company’s EGM that the plan was to turn the 12-acre site of the project into an industrial park.
Tatt Giap intends to develop 38 three-storey semi-detached properties and two three-storey detached corporate warehouse cum office buildings.
Liang said: “Over time, the sales of the project is expected to contribute positively to the earnings of the group. The project is expected to be completed within 36 months from the date of its commencement.
“However, the plans are subjected changes in the market conditions and sentiments.”
He noted that the group is diversifying into light industrial properties because “there are still demand for such properties in Penang from overseas investors.”
“Penang is well known as a semiconductor and electronic investment destination hub, which can attract investments,” explained Liang.
He added that Tatt Giap had obtained the approval of its shareholders at the EGM for the diversification plans.
The group is also targeting to raise RM34mil from its renounceable rights issue of 682,453,608 million new irredeemable convertible preference shares together with up to 85,306,701 free detachable warrants.
Tatt Giap is involved in the manufacturing and trading of steel products including stainless steel pipes and tubes as well as processing of stainless steel and other ferrous and no-ferrous metal products.
Since 2012, the group has been incurring losses due to the depression of global steel prices, influx of cheap steel imports from China and intense competition from other local manufacturers of steel pipes and other metal products.
The diversification plan is a long-term measure to turn around its financial performance.
According to Liang, the group also intended to sell its steel business.