KUALA LUMPUR: Tashin Holdings Bhd (THB) has acquired two pieces of land and buildings in Perai, Penang for RM43.50 million from CSC Steel Sdn Bhd (CSSB) as the company seeks to increase its production capacity to process slit coils, steel sheets and steel products.
THB's subsidiary Tashin Hardware Sdn Bhd (Tashin HW) has today entered into a sale and purchase agreement (SPA) with CSSB, a unit of CSC Steel Holdings Bhd.
Under the SPA, Tashin HW will purchase the two pieces of industrial land and buildings comprising a four-storey office, one-storey production and a guardhouse measuring 6.47-acre and 4.0-acre, respectively.
The two pieces of land and buildings have a 60 years lease expiring on December 6, 2052.
THB said the acquisition will be funded via a combination of proceeds raised from its initial public offering (IPO) where it has allocated for land acquisition and construction of a new factory (RM19.57 million), internally generated funds (RM3.93 million) and bank loan (RM20.0 million).
THB managing director Lim Choon Teik said the acquisition allows the company to expand its steel processing manufacturing facilities by adding new slitting and rotary/shearing machines and increase storage capacity for raw materials and finished products at the existing factory.
"The acquisition marks another milestone for THB to embark on the next phase of growth as the company can immediately expand the production capacity for steel manufacturing products at the newly acquired factory for steel pipes, flat/square bars, and checkered plates by installing new production line and do more trading activities with bigger storage area," he said in a statement today.
He said the new steel processing manufacturing facilities would enable THB to fulfill the increase in orders from end-product manufacturers especially the automotive segment due to the bigger capacity.
The bigger storage space will also enable THB to store the raw materials and finished products according to their types and specifications, thus enabling it to improve its logistic planning and operations, retrieving the products for production and delivery more efficient.
The annual production capacity for THB's steel processing and products manufacturing facilities is expected to increase from around 149,520 tonnes to 222,720 tonnes per annum after the expansion.
THB is optimistic the increase in capacity will enable it to gain higher revenue and profitability in future financial years.
The acquisition is expected to be completed within three months from the unconditional date as defined in the SPA.