DPS inks JVA with landowner for 190 acres of land in Melaka to pursue green business

MAIN Market-listed DPS Resources Bhd through its wholly owned subsidiary DPS Energy Sdn Bhd has sealed a joint venture agreement (JVA) with Mutiara Mahajuta Sdn Bhd to acquire a piece of land measuring 190.09 acres in Alor Gajah, Melaka to embark on a wide array of green ventures.

DPS Energy is principally engaged in carrying on the business of green energy and engineering works services.

The collaboration with Mutiara Mahajuta involves a pioneering project encompassing agro-tourism, cultivation of commercial crops, bio-farming, renewable energy, solar farms and aqua-phonics.

The said agriculture land which is free from encumbrances is poised to become a cornerstone of sustainable development in the region. The JV is a significant component of the group’s over-arching strategy to enhance the value of its accumulated landbank.

Since the pandemic, DPS Resources has strategically expanded its portfolio, amassing a total of more than 1,000 acres through various means, including JVs and acquisitions.

“Our collaboration with Mutiara Mahajuta is part of our broader strategy to make the most of our large landbank. Our existing landbank which exceed 1,000 acres in size can cater for both property development and the afore-mentioned sustainable-focused projects,” the company’s executive chairman Tan Sri Sow Chin Chuan pointed out.

Tan Sri Sow Chin Chuan

“We aim to tap the potential of these lands which we project has a potential gross development value (GDV) of around RM6 bil. We are also negotiating to secure neighbouring and adjacent lands surrounding our projects in the quest to expand our landbank.”

A filing with Bursa Malaysia today shows that under the structure of its JV, DPS Resources shall take charge of the project management with net profit allocation at a ratio of 65:35 (for Mutiara Mahajuta). The latter will then re-distribute its share to the individual landowners.

“Currently, we are engaged in discussions with prospective investors and partners, distinguished for their expertise in green energy and engineering services. Our collaboration is designed to maximise the potential of their lands while ensuring that our partners can fully leverage their resources,” revealed Sow.

“This initiative demonstrates our commitment to creating synergies through diverse partnerships which lays the groundwork for sustainable growth and community development. This commitment to sustainability and community betterment is evident in the financial framework of our collaborations.”

In tandem with this, it is worth noticing that the Madani government has recently unveiled the initiation of the Corporate Green Power Programme (CGPP) which is a significant policy change enabling Third Party Access (TPA) to the national electricity grid. Under the programme, participants can generate renewable energy and sell it to various off-takers.

All-in-all, Sow believes the group’s current land acquisition and subsequently the various green projects that are being rolled out will significantly boost the future earnings and financial resilience of DPS Resources.

“Moreover, they are poised to make a substantial contribution to the national green energy market and achieve the country’s environmental, social and governance (ESG) objectives,” envisages Sow.

“Their strategic location is itself advantageous, offering easy access to major highways and towns. Furthermore, the excellent sunlight exposure and the availability of tapping points make it an ideal site for establishing a solar farm.”

At the close of today’s trading, DPS Resources was up 0.5 sen or 0.85% to 59.5 sen with 773,700 shares traded, thus valuing the company at RM84 mil. – Nov 15, 2023

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