Logistics Holdings to set up a precast plant in Iskandar

Invests roughly S$5 million on JV.

Logistics Holdings Limited (Logistics Holdings), and together with its subsidiaries, intends to venture into the precast business and set up a precast plant in Iskandar region, Johor, Malaysia. The Group’s wholly owned subsidiary, Logistics Investment Pte Ltd (Logistics Investment), has teamed up with an unrelated joint venture partner, Concrete Innovators Co Pte Ltd (CONINCO), to incorporate a joint venture company, CCL Precast Pte Ltd (CCL Precast), with Logistics Investment holding a 80% stake.

Set up with an initial capital of S$100,000, CCL Precast intends to invest approximately S$5 million in aggregate to build a precast products manufacturing facility with an annual capacity of 21,000 m3 on a land plot of approximately 7 acres (2.83 hectares or 28,328 sq m) in Seelong, Iskandar region, Johor. The construction of the proposed precast plant is expected to complete in mid-2014. It is expected that the total investment, by equity and/or debt, in CCL Precast will be approximately S$5.0 million, which will be funded through the Company’s initial public offering proceeds, bank borrowings and/or the Group’s internal resources. 

Mr Phua Lam Soon, PBM, Chief Executive Officer of Logistics Holdings, commented, “Since our listing on the stock exchange, we have set out to explore joint ventures and strategic alliances in related business so as to open new revenue streams for the Group. We are delighted to have started our property development business in June 2013 and now venturing into the precast business.”

The proposed precast plant will primarily serve public and private residential or commercial projects in Singapore. Any excess capacity may also be channelled to external customers in Singapore or possibly also the Iskandar region.

Mr Phua added, “With the tightening of foreign labour and rising construction cost, we believe our proposed venture into the precast business can help us raise our operational productivity and improve our cost efficiency.” The Group has found a suitable partner for the proposed precast business as CONINCO has more than 35 years of experience in the construction industry and is an approved supplier of precast products to the Housing & Development Board and the Land Transport Authority.

Mr Phua concluded, “We aim to continue seeking other opportunities to expand our business further so that we can bring greater value to our shareholders in the long run.”