PGF Capital Berhad (PGF Capital), a leading insulation producer, has acquired a sizeable freehold land lot in Kulim, Kedah for the development of "Kulim East Industrial Park."
On Friday, the group entered into a Sales and Purchase Agreement through its wholly-owned subsidiary, NetZero Technology Sdn Bhd to acquire approximately 96,720 square metres (23.9 acres) of freehold land in Pekan Padang Meha from Senam Jaya Sdn Bhd.
The Land is strategically located approximately 30 minutes from PGF Capital's existing Perai manufacturing facility and 45 minutes from Penang Port, offering logistical advantages for the Group. The Acquisition, to be financed through a combination of internal funds and bank borrowings, is projected to complete within four calendar months from the date of the purchase agreement.
The Land shall be developed in two phases. Under Phase 1, a new manufacturing plant will be built to increase the Group's total annual insulation production capacity by 160% or 40,000 metric tonne ("mt"), from the existing 25,000 mt to 65,000 mt. Construction of the new plant will commence in early 2025, with commercial operations expected to begin by first half of 2026. Meanwhile, Phase 2 of the expansion will add a further 20,000 mt of capacity, bringing the total to 85,000 mt, with completion anticipated by first half of 2028.
Executive Director cum Group Chief Executive Officer, Mr Fong Wern Sheng, shared, "We are excited about the prospects this land offers, given its large acreage, which is sufficient to cater to our expansion needs for the next five years. Its strategic location, with close proximity to both our existing plant and the Penang Port, further enhances its value. We are building additional annual capacity of 40,000 mt to meet the growing demand driven by the global trend towards sustainability and energy efficiency. The increased focus on net zero targets presents significant opportunities for PGF Capital, as insulation plays a crucial role in reducing energy consumption and carbon emissions."
"At present, our operational expansion is buoyed by the surge in demand for insulation products, particularly in the Oceania market, where Australia's stringent energy efficiency building codes have significantly stimulated consumption. Furthermore, this expansion will also position us well to capture opportunities in other regions as demand for energy-efficient building solutions increases. Overall, we are optimistic on our future prospects."