FORMER attorney-general Tan Sri Mohamed Apandi Ali is back in action albeit in a corporate capacity.
Barely hours into his appointment as chairman of Jiankun International Bhd, he sprung into action by overseeing the signing of a memorandum of understanding (MOU) with Chuanplus Industries Sdn Bhd in a RM50 mil investment to produce nitrile rubber (NBR) for the booming rubber glove industry.
Apandi’s appointment was confirmed in a filing with Bursa Malaysia today along with renowned entrepreneur Datuk Tan Choon Hwa and ex-banker Edwin Silvester Das as executive directors.
The trio are highly optimistic to turn around the Main Board listed property developer while improving its business prospects in the near future.
“The new board of Jiankun decided to expand its source of profit,” Apandi pointed out in a statement issued by Jiankun.
“Entering the production of NBR in the upstream glove industry is seen as a corporate action that can contribute substantial profits in the future.”
According to the MOU, Jiankun and Chuanplus which is a Nilai, Negeri Sembilan-based NBR producer, have agreed to form a special purpose company (SPV) to build a new NBR production plant to enter the lucrative upstream production of nitrile gloves.
Jiankun will be responsible for raising funds while Chuanplus has the technology know-how to produce NBR.
“The SPV company will require an investment of RM50 mil of which Jiankun will hold 80% of the SPV with Chuanplus holding the rest,” explained Tan. “All these are still subject to further negotiation before a joint venture agreement is finalised.”
According to the investment plan, the RM50 mil investment is for the purchase of machinery, reactors, installations and all equipment.
It is expected that the land cost for the factory will be RM70 mil, thus bringing the total investment to RM120 mil. The alternative is to rent a factory.
“If everything goes as plan, it is estimated that after the first year of production, the order book will top RM175 mil,” projected a bullish Chuanplus CEO Chuan Tuck Soon.
At the close of today’s trading, Jiankun was up 7.5 sen or 12.3% at 68.5 sen with 34.16 million shares traded, thus valuing the company at RM115 mil. – Dec 22, 2020