Superlon eyes foothold in China mart

Superlon Holdings Bhd is set to establish a foothold in the Chinese market with a proposed acquisition of a thermal insulation product manufacturer.

In a filing to Bursa Malaysia today, Superlon said its wholly-owned subsidiary, Superlon Hong Kong Co Ltd, had entered into a conditional sale and purchase agreement to acquire the entire stake in Guangzhou Mutian Rubber Goods Ltd (GMR) for US$900,000 (about RM2.7 million).

GMR's principal business is that of manufacturing and selling of thermal insulation products for the heating, ventilation, air-conditioning and refrigeration industry.

Its factory in Guangzhou, Guangdong, has commenced production for nine months.

Superlon said the proposed acquisition would enable the company to have an immediate operating production facility in China with an existing customer base, and provide a base for its future expansion in China.

"The purchase price was arrived at on a willing buyer willing seller basis after taking into consideration the audited net assets of GMR as at Dec 31, 2010, the customer base of GMR, the existing on-going facility of GMR and the prospects of the China insulation market.

"In addition to the purchase price, the purchaser will reimburse the vendor for all payments made by the vendor to GMR to increase the investment capital of GMR from US$302,225.90 only to US$1 million prior to the completion of the agreement.

"The increase of the investment capital to US$1 million is to comply with the requirement of the relevant authorities in China on GMR," it said. -- Bernama