Friday 29 Mar 2024
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KUALA LUMPUR (April 29): Trans Pacific Textile (VN) Company Ltd, an indirect wholly-owned subsidiary of apparel manufacturer Prolexus Bhd, will be leasing two parcels of industrial land in Vietnam for a total sum of US$2.79 million (RM10.88 million) to set up a plant for the manufacturing of apparels.

In a filing with Bursa Malaysia, Prolexus said its indirect unit inked an agreement with Long Jiang Industrial Park Development Co today, to lease the land until Nov 26, 2057.

The lands, measuring 61,950 square metres and located within the in the industrial zone of Tien Giang province, Vietnam, will be rented at US$45 square metre for the whole lease term.

Prolexus said the construction of a manufacturing plant in Vietnam is in line with the group’s expansion plan to cater for its apparel products, as well as in meeting the growing demands from the customers.

“In deciding to set up the new plant in Vietnam, the group has taken into consideration, amongst others, the various business/investment incentives available in Vietnam, the generally lower cost of production in that country, as well as the availability of a large pool of labour force,” it said.

“Additionally, the group is able to benefit from the landmark features that are expected to be made available under the Trans-Pacific Partnership Agreement, particularly for the textiles industry, including the elimination of tariffs and duties on textiles related products,” it added.  

Trans Pacific Textile (HK) Ltd, the holding company of Trans Pacific VN, is a wholly-owned subsidiary of Prolexus.

Trans Pacific VN, incorporated in Vietnam on April 13, 2016, will be principally involved in manufacturing of apparels, the filing stated.

Prolexus said the rental was arrived at, after taking into account the potential and market value of the land, as appraised by Indochina Valuation Service Joint Stock Company, an independent registered valuer in Hanoi City, Vietnam, which pegged the land at US$2.97 million.

Prolexus intends to fund the lease through internally-generated funds, which will be paid in three instalments.

Barring any unforeseen circumstances, the transaction is expected to be completed by the third quarter of this year, the filing stated.

The transaction is not expected to have any effect on its earnings per share, net assets or gearing for the financial year ending July 31, 2016 (3QFY16).

Prolexus shares closed unchanged at RM1.87 today, for a market capitalisation of RM211.59 million.

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