Jiakun to put RM50mil in nitrile elastic production adventure
Jiakun
to put RM50mil in nitrile elastic production adventure
Kousalya Selvam
@SReporter
Kuala Lumpur – On
December 22, Jiakun International Bhd Property and construction group has
decided to invest into nitrile latex production which gives the rubber glove
business.
In a statement today,
Jiankun said it has inked a notice of comprehension with Chuanplus Industries
Sdn Bhd to contribute RM50 million to create nitrile elastic.
Chuanplus is a nitrile
rubber producer in Nilai, Negeri Sembilan.
Both companies have
made an agreement to shape a special purpose vehicle (SPV) to build another
rubber production plant and enter the rewarding upstream creation of nitrile
gloves, said Jiankun, adding that it will claim 80% of the SPV and Chuanplus
20%.
Jiankun will be
responsible for raising assets, while Chuanplus has the innovation expertise to
create nitrile elastic.
With this new pursuit,
Jiankun's newly appointed administrator Tan Sri Mohamed Apandi Ali and chief
chiefs Datuk Tan Choon Hwa and Edwin Silvester Das are hopeful of turning the
organization around and improving its business possibilities sooner rather than
later.
Jiankun disclosed that
the arrangement to go into the nitrile latex industry and become a raw material
provider for glove industrial facilities depends on the way that the Covid-19
pandemic has marked an ascent popular for elastic gloves, and thus, the cost of
the crude material or nitrile elastic has increased dramatically.
The RM50 million
venture is for the purchase of reactors, machinery, installations and all
equipment, said the company.
It added that the land
cost for the industrial facility is required to be at RM70 million, carrying
the total investment to RM120 million. Then again, the organization may hope to
lease a processing plant.
“If everything goes as
planned, it is estimated that after the first year of production, the order
book will top RM175 million," said Chuanplus CEO Chuan Tuck Soon.
"The factory
invested by Jiankun and Chuanplus is expected to produce 40,000 tons of nitrile
latex per year," Chuan added.
Jiankun's offers shut
7.5 sen or 12.3% higher at 68.5 sen, for certain 34.16 million offers done.
It has a market
capitalisation of RM114.54 million and year to date, the counter dramatically
increased from 34 sen.
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