Tradewinds to develop integrated rubber-city

KUALA LUMPUR: Tradewinds Plantation Bhd (TWSPlant) plans to develop a world-class integrated rubber-city in Kota Putra, Kedah, and aims to attract investments from downstream players in the rubber industry by leveraging the ample supply of latex from the northern region of Peninsular Malaysia as well as southern Thailand.

According to its chairman Datuk Wira Syed Abdul Jabbar Shahabudin, the project is formulated because of the ample supply of latex from the vast acreage of rubber plantations in the area especially from southern Thailand. However, investors have shunned the region due to a lack of security amid the political unrest there.

“This piece of land is actually at the side of our rubber plantation that we acquired a few years ago. The land size is 11,000ha so it configures well and we took advantage of the location because it is very close to Thailand. We have an advantage in terms of sourcing raw materials which would attract foreign investment, for example, building a tyre factory or other rubber enhancement product,” he said.

The project is still in its initial stage and the board is fine-tuning the master plan. Nevertheless, management has approached several state agencies as well as the Finance Ministry to provide incentives for potential investors to invest in the project. This could see total estimated investments of up to RM13 billion, according to TWSPlant CEO Chan Seng Fatt.
Syed Jabbar says Tradewinds took advantage of the location because it is very close to Thailand.
Chan says the total estimated investments could be RM13 billion.

Earlier the company held an EGM to seek shareholders’ approval to acquire Mardec Bhd for RM140 million. Prisma Spektra Sdn Bhd, a wholly owned subsidiary of TWSPlant, has entered into a conditional share sale agreement to purchase the entire issued and paid-up ordinary share capital of Mardec from Semi Bayu Sdn Bhd.

Syed Jabbar said the shareholders have agreed unanimously on the acquisition of Mardec as it is expected to create value for TWSPlant as well as Tradewinds Group. The acquisition is subject to the Economic Planning Unit’s approval which TWSPlant expects to obtain by the end of this month.

He added that the acquisition provides a strategic fit to TWSPlant’s planned expansion in the rubber sector. Mardec’s established rubber-related business network augurs well for TWSPlant’s strategy to expand its activities into downstream operations, complementing its existing upstream rubber plantation operations.

With the acquisition of Mardec, TWSPlant will look to start commercialising two specialty rubber products developed by the Rubber Research Institute to consolidate its position in the high-value niche rubber market. These rubber products namely Ekoprena and Pureprena will be commercialised and marketed in the European Union and Japan.

The acquisition of Mardec is expected to contribute 7% to 10% to group earnings.