KUALA LUMPUR, May 16 — Thong Guan Industries Bhd has entered into a joint venture agreement with Kedah State Development Corporation (PKNK) to jointly develop 8.09 hectares of freehold land into a proposed commercial area with an estimated gross development value (GDV) of RM200 million.

Thong Guan said the project will be undertaken by its wholly-owned unit, TG Development Sdn Bhd (TGD).

Comprising 221 units of shop/office lots, the project is expected to be completed within five years.

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“The project is in line with the group’s strategic planning to diversify into property development and to grow a new income source,” the plastic packaging manufacturer said in a filing with Bursa Malaysia today.

It added that under the agreement, TGD, being the developer, shall pay landowner PKNK a guaranteed minimum sum of RM19.75 million.

Thong Guan said the proposed development would be funded through internally generated funds, or bank borrowings, or corporate exercises which have yet to be determined by the board.

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It said the project is not expected to have any immediate material impact on the group’s earnings, net assets and gearing for the financial year ending December 31, 2024.

“However, it is expected to enhance the net assets of the group through contribution in earnings in the future financial years when the project is developed and sold progressively,” it said. — Bernama