Halal hub project to help KHSB return to profitability

Halal hub project to help KHSB return to profitability
By Azlan Abu BakarPublished: 2009/06/19

KUMPULAN Hartanah Selangor Bhd (KHSB) (6246) is set to return to the black by end-2009 as it starts to gain from the development of its industrial properties, especially the Selangor Halal Hub (SHH) in Pulau Indah, Klang.

The property arm of the state's investment firm Kumpulan Darul Ehsan Bhd also plans to dispose of non-strategic properties to improve its financial standing after suffering a loss of RM35 million in the last financial year ended December 31 2008.

"We have fully sold Phase 1 of SHH comprising 88ha of industrial land within four years, worth a total of RM133 million," said its executive chairman Datuk Abdul Karim Munisar.

He said Phase 1 is expected to bring in direct investments worth more than RM1 billion, creating about 2,000 new jobs.
Abdul Karim said major players that will operate in the area include Ramly Food Industries Sdn Bhd, Felda, Mara and PML Dairies.

"All facilities have been put in place. It's only a matter of time before these companies start construction of their facilities. One company has started construction and is expected to begin operations in two years," he said.

Speaking to reporters after KHSB's annual general meeting in Shah Alam, Selangor, yesterday, Abdul Karim noted that reclamation works for Phase 2 which involves 97.6ha of industrial land with a gross development value (GDV) of RM234 million have been completed.

"Negotiations with potential foreign and local investors are still ongoing, and we expect to conclude sales worth at least RM70 million this year," he said.

Abdul Karim said construction of the South Klang Valley Expressway is also expected to enhance the accessibility to Pulau Indah and will be a catalyst of growth for the Pulau Indah development.

"We expect to fully sell off Phase 2 within five years," he said.

With a land bank of more than 1,600ha, KHSB, together with Kumpulan Darul Ehsan, are also looking into the possibility of venturing into sand and minerals exploration and exploitation to diversify its cash stream.

"Besides the 1,600ha of land we have now, the state agency is expected to transfer another 2,000ha of land to us to help improve the cash flow of the company in the future," he said, adding that the firm is in the midst of acquiring a strategic land in Petaling Jaya for a proposed mixed development with a GDV of RM600 million.

For financial year ended December 31 2008, the company's revenue dropped 60.08 per cent to RM96.1 million from RM240.8 million previously.