KUALA LUMPUR (April 26): Kelington Group Bhd said the group has accepted a letter of intent for an onsite industrial gases supply scheme with an expected revenue of RM180 million over a 10-year period.

Kelington did not name the client but said it is “one of the largest optoelectronics semiconductor companies in the world”.

A definitive agreement for the supply scheme will be executed in due course, the industrial engineering group said in a filing with Bursa Malaysia.

Kelington said its indirect subsidiary, Ace Gases Marketing Sdn Bhd, will be setting up onsite generators to produce nitrogen, hydrogen and oxygen gases at the customer’s semiconductor manufacturing plant located at Kulim, Kedah and the supply of gases is expected to commence in the first quarter of 2023.

“Subject to the signing of a definitive agreement, this supply scheme is expected to generate a cumulative revenue of approximately RM180 million for the group over a period of 10 years via monthly fixed facility fees and sales of gases,” the group said. 

Kelington said the supply scheme is expected to contribute positively towards its earnings and net assets over the 10-year duration, starting from 2023.

Kelington shares closed two sen or 1.6% higher at RM1.27 on Tuesday (April 26), valuing the group at RM819.5 million.