KUALA LUMPUR: Benalec Holdings Bhd has finally obtained approval from the Department of Environment (DoE) for its reclamation work for the Tanjung Piai Integrated Petroleum & Petrochemical Hub project.
In a filing with Bursa Malaysia yesterday, Benalec (fundamental: 1.65; valuation: 1.2) said the Detailed Environment Impact Assessment Study (DEIA) — submitted jointly by its 70%-owned subsidiary Spektrum Kukuh Sdn Bhd and State Secretary, Johor (Inc) — was officially approved by the DoE on Jan 23.
The DEIA approval is valid for two years from the date of DoE’s letter of approval.
This confirms a report by The Edge Financial Daily on Jan 19, which stated Benalec could soon obtain the DoE approval for Tanjung Piai, as the neighbouring Forest City development by Country Garden Pacific View Sdn Bhd had already obtained the DoE approval earlier this month.
The Tanjung Piai project is located off Tanjung Piai, Johor, close to Jurong Island, Singapore, and will be built on reclaimed land measuring over 3,485 acres (1,410.33ha).
With this approval, Benalec said it is now targeting to commence the project’s phase one works in February. The DEIA was submitted late October last year.
“The reclamation works of phase one of the proposed project shall include the construction of an oil terminal, construction of a jetty, a bridge linking the island to the mainland and dredging,” the filing read.
“This approval represents a major milestone for the Benalec group and takes the group one significant step closer to the realisation of the group’s business plans, in sync with the country’s avowed objective of establishing itself as a storage and trading hub in the Asia Pacific region,” Benalec said yesterday.
Spektrum Kukuh had previously entered into a binding term sheet with the State Secretary, Johor (Inc) and 1MY Strategic Oil Terminal Sdn Bhd in March 2013 to undertake reclamation works and the sale of about 1,000 acres off the coast of Tanjung Piai.
However, the binding term sheet has been extended four times to June 11, 2015.
Analysts had previously said that based on a selling price of RM50 per sq ft for the initial 1,000 acres, which will rise to RM75 psf for the remaining 2,485 acres, as well as a conservative net profit margin of 10%, the Tanjung Piai concession will generate approximately RM10 billion in billings and RM1 billion in net profit over the next 10 to 15 years for Benalec.
Benalec shares traded six sen or 8.33% higher at 78 sen yesterday, with 8.68 million shares traded, giving it a market capitalisation of RM575.24 million.
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This article first appeared in The Edge Financial Daily, on January 28, 2015.