KUALA LUMPUR (April 23): Boilermech Holdings Bhd’s Indonesian unit, PT Boilermech Manufacturing Indonesia (PTBMI), is acquiring land in East Java for 54 billion rupiah (RM15.66 million) to build a new manufacturing plant.

PTBMI today signed an agreement with PT Maspion Industrial Estate for the acquisition of three adjoining portions of vacant industrial land measuring in total 30,000 square meters, Boilermech said in a stock exchange announcement.

“The group intends to construct a manufacturing plant on the acquired land, mainly for the fabrication of palm oil mill boilers.

“This will enable the group to better serve the vast palm oil mill market in Indonesia, which is the top palm oil producing country in the world and a major contributor to the group core business of palm oil mill boilers,” said Boilermech.

The group added that there is a working jetty located about 4.1km from the land which will facilitate sea transportation for the group’s operations.

The purchase price will be satisfied in cash using internally-generated funds, it said.

“The proposed acquisition will not have any effect on the company’s gearing, share capital and substantial shareholders’ shareholdings,” the group said, adding that it is also not expected to have any material effect on the net assets per share, earnings and earnings per share of the group for the financial year ending March 31, 2020.

However, it expects the acquisition to contribute positively to the group’s future earnings when the manufacturing plant is fully operational.

“The proposed acquisition is expected to be completed by the third quarter of 2019,” Boilermech said.

Boilermech’s share price closed up 1 sen or 1.8% at 56 sen today, giving the group a market capitalisation of RM291.54 million.