KUALA LUMPUR (Oct 26): BHS Industries Bhd said it is in talks with potential investors to set up a tissue paper factory of 5,000 tonnes, as part of the first phase of the Pekan Green Technology Park in Kg Paloh Hinai, Pekan, Pahang.
In a filing with Bursa Malaysia today, BHS said the plan has yet to take off.
"(We are) presently talking to potential investors and once (we) have anything to report, (we) will make an announcement to Bursa Malaysia," it added.
The Pahang state government had on March 10 this year approved and granted its wholly-owned subsidiary, Ultimate Ivory Sdn Bhd, a piece of land measuring 26 acres in Kg Paloh Hinai, Pekan, Pahang for development of the first phase of Pekan Green Technology Park.
BHS is developing a total of 375 acres of land in Pekan into a green technology park, where the main industries located in the park will be using green technology to convert empty fruit bunches into pulp and paper, box liner paper, corrugated paper and tissue paper.
They will also be using bio-technology to convert frond to agro-feed, and other palm waste into organic fertiliser.
"To further develop the green technology and bio-technology knowhow, BHS will set up an education hub for research and development of these two branches of science, in collaboration with the local and overseas universities," it said.
The development of Pekan Green Technology Park will be divided into five phases.
"Since the group is developing the land in phases, it is in a position to manage and control its financial commitment. For Phase 1, the total construction cost expected to be incurred is RM14 million. Thus far, the group has incurred about RM4.2 million on the infrastructural work, as part of the cost of construction," said BHS.
"Phase 1 has already taken off and BHS through its subsidiary, Nextgreen Pulp and Paper Sdn Bhd, is building a pulp and paper mill at the park with an annual production capacity of 10,000 tonnes," said BHS.
On Oct 19, 2015, BHS had raised a gross proceeds of RM41.6 million, through a rights issue to finance the pulp and paper project.
"By late first half of 2017, we expect the mill to be ready for production," BHS added.
Meanwhile, BHS said Phase 2 of the development may involve a factory with a capacity to produce 100,000 tonnes of box liner paper and 120,000 tonnes of corrugated paper, while Phase 3 will see another factory with a capacity to produce 65,000 tonnes of tissue paper being built.
"BHS is (also) presently talking to potential investors and once it has succeeded, it will make an announcement to Bursa," it added.
Phase 4 consists of a factory to produce agro-feed and organic fertiliser and Phase 5 has been earmarked for light industries.
In view of this, BHS said it intends to diversify into industrial park development and management, including construction and property development and the group will seek shareholders’ approval in the near future.
As at 4.18 p.m., BHS shares were traded up 1.5 sen or 3.45% at 45 sen, with 1.71 million shares done. Its market capitalisation stood at RM184.75 million.