NCER Gets A Boost As Amanahraya Acquires The First High-Tech Pharmaceutical Factory At Rm30.875 Million
AmanahRaya supports government efforts in promoting the biotechnology industry in Malaysia as well as contributing to the development of the Northern Corridor Economic Region (NCER) in Penang
PULAU PINANG, 11 December 2007 -- The Northern Corridor Economic Region in Penang received a boost today when Amanah Raya Berhad entered into a purchase and 10-year lease arrangement of a hi-tech pharmaceutical factory in Seberang Perai, Pulau Pinang, boosting alongside Government efforts to promote the biotechnology industry.
The property will be acquired from Horizon Frontier Sdn Bhd, the company that owns the land where the manufacturing facilities of Hi-City Bioscience Berhad is erected near to the landing-side of the second Penang Bridge on the mainland.
With the acquisition, Hi-City Bioscience Berhad will be able to focus its capital on its core business instead of locking its capital into property assets, AmanahRaya said in a statement.
The purchase will be backed by a 10-year guaranteed lease with High-City Bioscience Berhad through a lease agreement to be entered with its subsidiary, Clini-Food Sdn Bhd.
High-City Bioscience Berhad, a public listed company on the second board of Bursa Malaysia, is a manufacturer and distributor of consumer and pharmaceutical products for the domestic and international markets.
Signing on behalf of Amanah Raya Berhad were its Group Managing Director Datuk Ahmad Rodzi Pawanteh and Company Secretary Encik Zainul Abidin Ahmad while signing on behalf of High-City Bioscience Berhad /Clini-Foods Sdn Bhd were Managing Director Mr Heah Chew Ting and Director Professor Emeritus Dato’ Paduka Dr. Khairuddin Bin Mohamed Yusof.
Signing on behalf of Horizon Frontier Sdn Bhd for the sale of the land were its Director Mr Gan Guo Chyang and Director Yew Lye Huat.
Chief Minister of Penang, Tan Sri Dr Koh Tsu Koon witnessed the signing of the agreements between the parties. Also present were Amanah Raya Berhad chairman Datuk Dusuki Ahmad and AmanahRaya-JMF Asset Management Managing Director Datuk Mohamed Azahari Mohamed Kamil.
The acquisition is the third project of AmanahRaya in Penang after it acquired a medical college in Kepala Batas and entered into a joint venture development of a shopping mall in Bandar Baru Perda, Bukit Mertajam.
The acquisition of this high-tech and environmental-friendly factory will add a new asset-class to enhance the property portfolio of AmanahRaya that has the potential to be injected into AmanahRaya REIT.
Besides generating a stable income for its investment, this acquisition is also an initiative by AmanahRaya to support the government efforts in promoting biotechnology industry in Malaysia as well as contributing to the development of Northern Corridor Economic Region (NCER) in Penang.
According to the Economic Report for 2002/2003, some 50 Malaysian companies use biotechnological processes (primarily in food production, herbal products, and pharmaceuticals) but this still falls short of fulfilling the country’s biotechnological potential.
With over 12,500 species of flowering plants, 1,100 species of ferns, and one of the world’s most diverse coral communities, Malaysia has a very diverse bio-source universe still untapped and AmanahRaya is keen to help develop the potential.
This property will be used as the R&D, manufacturing and warehousing facilities for pharmaceutical products.
The new facility, built to meet the cGMP standards of the United Kingdom and EU, will allow Hi-City Bioscience Berhad to form strategic partnerships with other world-class pharmaceutical players for the undertaking of contract manufacturing.
The lease arrangement is on a ‘triple-net’ basis in which the Lessee will be responsible for the property maintenance and management, statutory payments, insurance and capital expenditure.
The net yield will start at 7.5% for the first 2 years and shall increase gradually in every 2 years. The lease will give AmanahRaya a stable net rental income of average 8.5% for 10 years.
This lease is also backed by a security deposit of an amount equivalent to three years rental.
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