Tradewinds Plantation gets nod to buy Mardec for RM140mil

KUALA LUMPUR: Tradewinds Plantation Bhd has received the green light from its shareholders to acquire rubber processor Mardec Bhd for RM140mil cash.

Chairman Datuk Wira Syed Abdul Jabbar Shahabudin said the acquisition was part of Tradewinds Plantations' strategy to expand its rubber business into downstream activities, complementing its existing rubber plantation operations.

However, he said the acquisition was still subjected to the Economic Planning Unit's (EPU) approval.

“We hope to receive the EPU's approval by the end of the month,” he said after the company's EGM yesterday, adding that prospects for the rubber sector “looked good.”
(From left) Syed Abdul Jabbar, Chan and Mardec CEO Khalid Bahsoon at the company’s EGM yesterday.

Mardec was established in 1969 with the aim of increasing the income of rubber small holders in Malaysia and to upgrade the quality of rubber produce.

For the five-month period ending May 2011, Mardec recorded an unaudited pre-tax profit of RM16.1mil.

Tradewinds Plantation, through Mardec, will be looking to consolidate its position in the high value niche rubber market by commercialising two specialty rubber products, Ekoprena and Pureprena specialty latex grade rubber.

Mardec chief executive officer Khalid Bahsoon said a facility worth RM10mil would be set up and ready by March next year to manufacture the Ekoprena specialty rubber for the European market.

He said the rubber would be for the production of eco-friendly tyres, adding that trial sales had already begun. Tradewinds Plantation's core business is in oil palm cultivation.

Abdul Jabbar, meanwhile, said the company was eyeing opportunities to secure more landbank (for both its plantation and rubber businesses), but added that it was “in no hurry.”

“We are selective about the right size and price. We're looking (for land) both locally and overseas. However, our landbank can last us till 2014, so we're in no hurry,” he said. Tradewinds Plantation has about 142,000 hectares of land, of which 6,120 hectares has been allocated for rubber plantation.

Tradewinds Plantation chief executive officer Chan Seng Fatt said Mardec would play a key role in the company's long term plan to develop an integrated rubber city in Kota Putra, Kedah.

He said the development of the “rubber city” was still in its early stages, adding that response from potential investors had been encouraging.

“We're still waiting for the relevant approval and still drawing up the master plan for the rubber city,” he said.

When asked if Tradewinds Plantation would consider acquiring rubber glove companies, Chan said: “It's not in our gameplan.”