Posted on 19 Jan 2015
Amalgamated Industrial Steel Bhd (AISB) wants to diversify its business to include property development as the contribution from the property development business may potentially exceed 25% of its net profit in future.
AISB, whose principal activities is the manufacture and sale of mild steel pipes as well as trading of construction related materials, said it intends to venture into property development to diversify its earnings base and to enhance its overall long term growth prospects.
"The board anticipates that the contribution of the property development business will be another source of revenue stream and may contribute to stable earnings growth for the group in the future," it said in a filing with Bursa Malaysia last Friday.
It said that the proposed diversification would reduce its sole dependency on the existing core business and the expansion is part of its long term strategy to diversify into other industries with strong growth prospects.
However, the manufacturing and selling of mild steel pipes and trading of construction related materials will continue to be the core business of the group.
AISB plans to undertake the development and construction of industrial buildings on its own property at Seksyen 15, Shah Alam with estimated gross development cost and value of RM146 million and RM161 million respectively.
The development timeframe of the project will be determined at a later stage upon final completion of project evaluation.
The proposed diversification is expected to be implemented this year, subject to all the required approvals being obtained.
The proposed diversification will proceed with immediate effect upon AISB obtaining shareholders' approval at a forthcoming EGM.
