PETALING JAYA: Chemical supplier Samchem Holdings Bhd’s wholly-owned subsidiary, SC Terminals Sdn Bhd (SCTSB), has entered into an agreement with Idemitsu Chemicals (M) Sdn Bhd (ICMSB) for the proposed acquisition for the right of use of part of a parcel of leasehold land in Johor for RM21.08mil.
In a filing with the local bourse, the group noted that the leasehold for the land that measures about 64.21 hectares, will be a 60-year lease and will expire on May 29, 2051.
According to the group, the land will be used for chemical storage and processing of resin and synthetic latex-related products.
It added that the proposal is expected to be funded entirely via internally generated funds or bank borrowings.
Samchem said concurrently, its subsidiary had entered into a supplemental agreement with ICMSB in relation to a cost-sharing and service arrangement to govern the upkeep, maintenance, repair, and replacement of the basic infrastructure and common facilities.
The supplemental agreement also included a jetty agreement whereby SCTSB has proposed to utilise the jetty for its business operations and intends to undertake certain upgrades to its facilities, subject to obtaining the necessary regulatory approvals.
Meanwhile, Samchem said the proposal will provide them with a space that’s suitable for the development of a bulk liquid storage terminal.
In doing so, the group will be able to expand its storage capacity for its internal usage as well as for rentals to its customers.
“The expanded facility will also enable us to undertake bulk breaking activities, where chemicals stored in bulk can be repackaged into smaller packaging for distribution to customers. This is expected to strengthen our competitive position and enable it to move further up the value chain of its chemical distribution business,” it said.
It added that the land was selected for its strategic location, with close proximity to its key customers and the availability of nearby jetty facilities that will support its operational requirements.