13 Sep 2024 PGF acquires land in Kulim for new plant set to more than triple capacity
Source: https://theedgemalaysia.com/node/726699
KUALA LUMPUR (Sept 13): PGF Capital Bhd’s (KL:PGF), which mainly manufactures insulation products, said on Friday that it is buying a piece of land in Kedah for RM40 million to be developed into a factory.
The 96,720-square-metre land in Kulim, Kedah is expected to be developed in phases into a manufacturing facility that would more than triple its annual production capacity once fully-completed in June 2028, PGF said in a statement.
“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,” said chief executive officer Fong Wern Sheng. The close proximity to PGF’s existing plant and the Penang Port further boosts the land’s value, he noted.
The first phase will see the construction of a plant that will increase its total annual insulation production capacity by 160% to 65,000 metric tonnes, from 25,000 metric tonnes currently. Building works are expected to begin in early 2025, with commercial operations targeted for June 2026.
The second phase will add another 25,000 metric tonnes, bringing the total to 85,000 metric tonnes by the first half of 2028.
The expansion is currently backed by a surge in demand for insulation products, particularly in the Oceania market, where Australia’s stringent new energy-efficiency building codes have “significantly” lifted demand, said Fong.
“Furthermore, this expansion will also position us well to capture opportunities in other regions, as demand for energy-efficient building solutions increases,” he said. “Overall, we are optimistic on our future prospects.”
Fong had earlier told The Edge that the company has allocated capital expenditure of RM200 million for the expansion project in Kulim, including land, building and machinery.
PGF has signed a five-year agreement with advanced building materials company Centria Building Material Manufacturing (Shanghai) Co Ltd for distribution of its mineral wool sandwich panels in Malaysia, targeting industrial and commercial buildings, including data centres.
Fong now said PGF is exploring the possibility of jointly establishing a local manufacturing facility with Centria, to produce insulated panels with both glass wool and stone wool cores.
“This land in Kulim offers ample space to accommodate such potential expansion, positioning PGF Capital for long-term growth and market leadership in the insulation sector,” he added.
Shares of PGF were trading at RM1.94 at 2:10pm on Friday, giving the company a market capitalisation of RM376 million.
