Seacera to diversify into property development and construction

by **Cals** Wed 12 Nov 2014, 03:08

Seacera to diversify into property development and construction

By Ahmad Naqib Idris / TheEdge Markets.com | November 11, 2014 : 10:02 PM MYT
KUALA LUMPUR (Nov 11): Ceramic tile manufacturer Seacera Group Bhd has proposed to diversify its business into property development and construction to enhance its business prospects.

In an announcement today, Seacera said it expected the property development and construction segments to emerge as major contributors to its business, as the group had disposed its plastics packaging business, while its ceramic tiles business posted a net loss of RM10.58 million in FY13.

The company’s subsidiary, Seacera Land Sdn Bhd is currently in the process of acquiring a 15.23ha of land in Melaka from Sri Alai Sdn Bhd, with plans to develop an ecotourism resort on the tract.

Seacera has also disposed its 49% equity interest in Seacera Land to OCR Land Holdings Sdn Bhd for RM20 million.

“Although the group has no prior experience in property development activities, the board is of the view that through the disposal, OCR as the strategic partner is expected to, among others, contribute their experience and expertise to spearhead the property development activities of Seacera Land,” said Seacera.

Meanwhile, Seacera will venture into the construction segment via its 60% equity stake in SPAZ Sdn Bhd, which is involved in the business of general contractor with a Construction Industry Development Board Malaysia (CIDB) grade G7 license.

“The board believes that the proposed diversification would contribute positively to its future earnings, supported by the revenue contribution from the property development and construction activities that are expected to improve the financial position of the group as well as reducing the risk of dependency on its sole existing business, i.e. manufacturing and trading of homogeneous and ceramic tiles,” it said.

The company expects to complete its diversification by the first quarter next year.

Seacera share price shed six sen or 5.61% at RM1.01, bringing its market capitalisation to RM180.33 million.