Astramina shelves Sendayan factory plan, opts for Kepong expansion to triple capacity

PETALING JAYA (July 28): Astramina Group Bhd has shelved plans to develop its Sendayan TechValley land into a new manufacturing facility, opting instead to expand production at an adjacent factory in Kepong that is expected to triple its annual manufacturing capacity.

It said in a Bursa Malaysia filing on Monday (July 27) that the strategic shift follows a review of the group's expansion priorities and replaces plans first disclosed in its November 2019 Information Memorandum.

The halal seasoning manufacturer and food ingredients distributor said it will fit out and operationalise Kepong Factory No. 104, a leasehold industrial property adjoining its existing headquarters and manufacturing facility in Sri Edaran Industrial Park, Kuala Lumpur, which it acquired on Jan 17, 2025 for RM2.08 million.

The group plans to invest a further approximately RM1 million in renovation works and machinery, funded through internally generated funds. The fit-out is about 50% complete, with operations targeted to begin in the first quarter of 2027.

Once operational, the facility is expected to increase Astramina's annual manufacturing capacity to about 2,400 metric tonnes (MT) from approximately 800 MT currently.

The company said expanding an existing factory would allow it to increase production capacity more quickly and at a significantly lower capital cost than developing the greenfield Sendayan site, while making better use of its existing infrastructure, workforce and operational resources in Kepong.

Sendayan project put on hold

The Sendayan TechValley land in Bandar Sri Sendayan, Seremban, Negeri Sembilan will remain undeveloped for the time being. The board said it would reassess the timing of the project's development periodically after taking into account the group's operational requirements, market conditions and funding availability.

The company acknowledged that deferring the Sendayan development would result in continued holding costs for the land, including financing expenses, quit rent and assessment rates. 

It also highlighted the increased concentration of its manufacturing operations within the Kepong industrial area, as well as the possibility that Factory No. 104's eventual production capacity could differ from current projections once the fit-out is completed.

Nevertheless, the board said it believes these risks are manageable and outweighed by the operational and strategic benefits of the revised expansion plan, citing the lower capital investment required, shorter implementation timeline and reduced execution risks associated with expanding an existing facility.

..........

Read about emerging trends, data-backed insights, growing subsectors, and expert commentaries in EdgeProp print. Subscribe now for your free copy!