Tashin buys land and buildings in Penang to expand steel production

Tashin buys land and buildings in Penang to expand steel production

23 Apr 2021

KUALA LUMPUR (April 23): Tashin Holdings Bhd is acquiring land and buildings next to its existing factory in Perai, Penang, for RM43.5 million as it seeks to increase its production capacity to process slit coils, steel sheets and steel products.

The group said the annual production capacity for the group’s steel processing and products manufacturing facilities is expected to increase to 222,720 tonnes per annum from 149,520 tonnes currently.

In a bourse filing, Tashin said its wholly-owned subsidiary Tashin Hardware Sdn Bhd will purchase the two contiguous pieces of leasehold industrial land, and buildings comprising a four-storey office, one-storey production centre and a guard house, measuring 6.47 acres and 4.0 acres respectively, from CSC Steel Sdn Bhd.

It said the acquisition will be funded via a combination of proceeds raised from Tashin’s initial public offering (the group had allocated RM19.57 million for land acquisition and construction of new factory), internally-generated funds (RM3.93 million) and bank loan (RM20 million).

Tashin managing director Lim Choon Teik said the acquisition will allow the group to expand its steel processing manufacturing facilities by adding a new slitting and rotary/shearing machines and increase storage capacity for raw materials and finished products at the existing factory.

“The new steel processing manufacturing facilities will enable Tashin to fulfil the increase in orders from end-product manufacturers especially the automotive segment due to bigger capacity,” he added.

Tashin said the bigger storage space will also enable the group to store the raw materials and finished products according to their types and specifications.

Tashin’s share price closed 4 sen or 7.21% higher at 59.5 sen today, valuing the group at RM193.69 million.

Source: The Edge Markets