Goodway to diversify into property development, construction

KUALA LUMPUR: Goodway Integrated Industries Bhd, the country’s largest manufacturer of rubber compounds and tyre retreader, has proposed to diversify its existing core business to include property development and construction.

It will seek shareholders’ approval at the forthcoming extraordinary general meeting, and expects the proposed diversification to be completed by the second quarter of this year.

In a filing with Bursa Malaysia yesterday, Goodway Integrated said it intends to relocate the manufacturing operations of its unit Big Wheel Holdings Sdn Bhd and its subsidiaries at the parcel of leasehold land measuring 15.6 acres (6.31 hectares) in Kota Kinabalu, Sabah with the intention of redevelopment.

In anticipation of the proposed diversification, Goodway Integrated had incorporated a new subsidiary, GIIB Development Sdn Bhd (GDSB), to carry out the development of a warehouse-cum-office on the land.

The proposed project will entail the development of six units of single-storey detached warehouses with three-storey offices, 34 single-storey semi-detached warehouses with three-storey offices, and 30 units of 2-storey light industrial warehouses with offices.

It will have an estimated gross development value of RM183.43 million, with a gross development profit of RM33.85 million. The application for planning permission was approved by the Kota Kinabalu City Hall on Jan 27.

Goodway Integrated said the board has taken into consideration the group’s plan to diversify its earning and income stream to unlock the value of the land. “The board is of the view that the proposed diversification will be beneficial to the group’s future prospects and provide the necessary value to improve the net assets of the group and reduce borrowings to complement its rubber compound manufacturing business growth,” said Goodway Integrated.

“The group will be in a position to possibly build on its property and development experience arising from this project, should later opportunities to diversify into the property development and construction businesses arise, and is deemed as desirable by the company,” it added.

Bursa Malaysia’s Main Market listing requirements dictate that a listed issuer must obtain its shareholders’ approval for any transaction that might result in the diversion of 25% or more of its net assets to an operation which differs widely from those operations previously carried on, or the contribution from such an operation of 25% or more of its net profit.


This article first appeared in The Edge Financial Daily, on April 15, 2014.