KUALA LUMPUR - Kumpulan Jetson Bhd, a property developer and auto parts maker, expects a strong take-up rate for its RM174.4 million integrated industrial property project in Yangzhou City, China.
The project, dubbed Jetson Integrated Industrial Park (JIIP), comprises 10 units of detached factories, four blocks of four-storey exchange centre, a six-storey hostel and a six-storey production centre.
So far, three units of the detached factories have been sold to investors. These units were leased back to Jetson for its production and warehousing of anti-vibration systems to serve the domestic automotive market.
The project, which has a gross development cost of RM124.6 million, is expected to be completed by the end of first quarter of 2014.
"We are confident that all the units will be sold. I don't think it will be difficult. So far, we are in talks with several serious investors on other units," said group managing director Datuk Teh Kian An after its extraordinary general meeting yesterday.
For now, funding for the JIIP project will be mainly come from internally generated cash as well as bank borrowings. It has no immediate plans to go to the equity market to raise funds.
"As we have sold three units of the detached factories, that money will also be used for the development of JIIP. Nevertheless, we will keep all our options open on whether or not to raise funds from the capital market," said Teh, who added that the company will aim to have a proper debt-to-equity ratio.
As of end September 2011, it has a gearing of 0.6 times.
Meanwhile, the company will start its production of the anti-vibration systems in China in the second quarter of this year. The part re-location will free up production capacity in Malaysia to cater for other growth markets like India and Iran.
"We see China as a growing economy that we cannot ignore, especially if we want to be in the manufacturing business," he said.
Teh also said that the company now exports between 25 and 30 per cent of its manufactured products overseas, with China being a major market.
"We have to be in China to further improve our manufactured items, mainly the anti-vibration system business," he added.
Jetson executive director Lee Chee Hoe said the company is also in talks with auto parts firms and government's international trade agencies to participate in the JIIP project and take advantage of the China market.
"We believe this will be an easier platform for them to move into China," he said.
The company expects the construction development division to contribute positively to its earnings between 2012 and 2014, and the manufacturing division in 2014.
-- Business Times
