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GBH poised to venture into property development

Goh Ban Huat Bhd (GBH) aims to venture into property development in the next three to five years as it mulls over various types of developments for its 14.86 acre-land parcel in Segambut, said its director Thor Poh Seng.

The group expects property development to overtake its current core businesses in its own brand of ceramics and sanitary ware, clay pipe-manufacturing and warehouse-leasing in terms of size and value, he told reporters after its AGM yesterday.

On the cards was a mixed-development project comprising residential and commercial units, he said, adding that the Segambut land had a book value of RM119.88 million.

“We hope for the place to be more developed as our neighbours start work on their land,” he said.

The land parcel is close to 47 acres of land owned by Tan Chong Motor Holdings Bhd. While the parcel now houses its vehicle assembly operations, Tan Chong has plans for a major property development there.

Meanwhile, Thor said the group was adopting new strategies to turn around the ailing GBH group, which had been in the red since 2006. The group expected to break even this year via new strategies implemented by the new management, he added.

He alleged that the losses were due to the inefficiency of the previous management, which had left following the ouster of the founding Goh family by Tan Sri Tan Hua Choon, better known as Robert Tan, in a boardroom tussle last year.

On its loss-making sanitary ware business GBH Bathroom Products Sdn Bhd, Thor said its sanitary ware manufacturing plants had ceased operations in January.

GBH had instead engaged some companies in China to produce the sanitary ware under its brands on an original equipment manufacturing (OEM) basis to reduce overhead costs, and expects to save RM6 million to RM7 million a year.

The plant has been leased out to another sanitary ware manufacturer. The group also sourced some of its goods from the manufacturer, he said.

Thor said GBH would work to strengthen its marketing and distribution channels.

On tableware manufacturer GBH Crown Lynn Sdn Bhd, another loss-making division, Thor said GBH was working on strengthening the company’s marketing team as it still saw a potential in the Crown Lynn brand.

As Crown Lynn produces luxury, customised tableware, GBH was mulling a foray into the lower-end, retail market to expand its tableware business, he added.

The group is also considering a relocation of Crown Lynn’s show unit in upscale retail centre Pavilion.

Meanwhile, its clay pipe-manufacturing business, which is on the mend, chalked up to RM28 million in annual sales last year, said Thor.

To strengthen the division, GBH planned to invest around RM200 million to RM300 million in its plants to replace and upgrade machinery, increase productivity and throughput, he added.

Part of the funding will come from a renouncable two-call rights issue of up to 123.84 million shares completed earlier this year, which raised RM74.3 million to be used to repay bank borrowings and for working capital.

The plants can manufacture up to 3,000 tonnes of products a month, and its current utilisation levels were at 70% to 80%, he said.
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