CHINHIN (5273) - Chin Hin acquires Mi Polymer Concrete Pipes for RM35 million
(From left) Haw Choon, Chin Hin deputy group executive chairman Datuk Seri Chiau Beng Teik, chairman Datuk Seri Dr Nik Norzrul Thani Nik Hassan Thani, Mi Polymer chief executive officer Peter James Boatman, ans Mi Polymer director Tay Heng San during the signing ceremony yesterday.KUCHING: Integrated building materials provider Chin Hin Group Bhd (Chin Hin) announced its acquisition of polymer concrete pipe manufacturer Mi Polymer Concrete Pipes Sdn Bhd (Mi Polymer) for RM35.0 million to capture opportunities in the domestic and South East Asian region.
Mi Polymer is the pioneer of polymer concrete technology in South East Asia, and a market leader in providing polymer concrete pipes under its own brand Mi pipes.
Currently, all the Mi pipes produced in its factory in Batu Pahat, Johor are exported to Singapore.
Speaking at the signing ceremony yesterday, Chin Hin Managing Director Chiau Haw Choon revealed that the Mi pipes were complementary to the Group’s existing precast concrete pipes which are part of its sewage solutions segment.
Chiau Haw Choon, group managing director, Chin Hin Group Berhad said: “The acquisition of the region’s first polymer concrete pipe technology effectively positions Chin Hin as South East Asia’s first and only integrated sewage specialist providing a full range of sewage solutions.
“With Mi Pipes, we not only add to our portfolio new products with advanced technology, but more importantly open up new markets with ready clientele for Chin Hin, with the potential to grow even further by serving the requirements in Malaysia and the region.
“The ever-increasing population in South East Asia would inevitably heap tremendous pressure on demand for sewage pipes, as older pipe systems need to be upgraded to transport higher tonnage of wastewater.
“Our larger portfolio of sewage solutions would place us in good stead to tap into this huge potential market going forward.”
The population of Southeast Asia is projected to grow from approximately 633 million in 2015 to 725 million by 2030, resulting in a corresponding increase in demand for sewage pipes.
Recognising this, regional governments have set aside a portion of public spending on development and upgrades of sewage infrastructure. In Malaysia, the government has allocated RM9 billion under the National Sewerage Project, of which RM510 million is earmarked for 2017 alone.
Mi pipes are corrosion resistant and need little to no maintenance, hence enhancing its durability.
Its smaller diameter of 900 mm and below makes for easy installation and suitability for use for last mile sewage transport. Mi pipes are backed by a 50-year guarantee and have attained international ISO: 9001:2008 certification.
Chiau added that it is timely for the Group to bring this proven polymer concrete technology to the domestic and regional arenas, to meet higher demands of sewage infrastructure due to rapid development and urbanization.
“Mindful of these exciting opportunities, Mi Polymer has begun constructing its second factory in Batu Pahat, Johor, which would double its production capacity from 20,000 metric tonnes (MT) per year, to 40,000 MT per year. The second factory is targeted for completion in end-2017.”
“With this, we intend to expand our customer base even more going forward. With the upcoming larger capacity, track record and end-to-end product range, we plan to participate in sewage infrastructure tenders in Malaysia and Southeast Asia, particularly Indonesia, Philippines and Myanmar, to supply sewage solutions,” concluded Chiau.
The acquisition of Mi Polymer entails Chin Hin buying one million shares in Mi Polymer, representing 100 per cent of the company. The acquisition would be financed by internally generated funds.
The completion of the exercise is not subject to approvals from shareholders and Bursa Malaysia Securities Bhd.
Mi Polymer achieved net profit of RM7.4 million on the back of RM23.3 million revenue for the financial year ended June 30, 2016 (FY2016).
The purchase consideration of RM35.0 million is at a price-earnings ratio of 4.7 times.
Mi Polymer would contribute positively to Chin Hin in the current financial year ending 31 December 2017 (FY2017) and beyond.
Under the terms of agreement, Mi Polymer would provide a profit guarantee of RM6 million in FY2017.
CHINHIN (5273) - Chin Hin acquires Mi Polymer Concrete Pipes for RM35 million
http://www.theborneopost.com/2017/04/04/chin-hin-acquires-mi-polymer-concrete-pipes-for-rm35-million/
