KUALA LUMPUR (Dec 28): Tiong Nam Logistics Holdings has entered into a joint venture (JV) agreement with Johor Corp to develop a high-tech logistics industrial park on a 300-acre land at Sedenak Technology Valley, Johor.

In a statement on Wednesday (Dec 28), Tiong Nam said its wholly owned subsidiary Tiong Nam Logistics Solutions Sdn Bhd (TNLS) inked the agreement with Johor Corp’s wholly owned subsidiary JLand Group Sdn Bhd (JLG) following a preliminary collaboration agreement in August 2022.

The JV company — known as JTN Logistics Park Sdn Bhd — will undertake the acquisition of the 300-acre land, plus the development and management of the industrial park.

“Under the JV agreement, TNLS will hold 51,000 ordinary shares, representing 51% equity stake, while JLG will hold the remaining 49,000 ordinary shares or 49% equity stake in the JV company,” said Tiong Nam.

The development consists of ready-built and customised warehouses, factories and commercial buildings, along with integrated logistics infrastructure for global businesses.

JTN will also acquire the development land from JLG for a purchase consideration of RM52.3 million, or RM4 per square foot.

The land has a leasehold of 99 years and is currently under the ownership of Johor Corp. It will be procured by JLG before its sale to JTN.

JTN will pay the land purchase consideration to JLG through the advances from JV shareholders, while TNLS will be involved in funding the working capital through internally generated funds.

Additionally, JTN is expected to prepare and submit the development layout plans to the Johor state authorities within the next 12 months, with construction expected to begin in 2025.

Tiong Nam’s managing director Ong Yoong Nyock said the JV is a recognition of the group’s capabilities and a milestone in its track record in transforming Johor’s logistics landscape over the past four decades.

“We will bring tremendous value to the project which caters to Johor’s strategic goals, by leveraging on our experience as a leading integrated logistics and warehousing services provider to multinational customers across Southeast Asia,” said Ong.

“The technology-enabled development will also enhance the state’s logistics infrastructure to support greater international connectivity and trade.”

Tiong Nam’s share price closed lower by two sen or 2.47% to 79 sen for a market capitalisation of RM416.98 million.

Source: EdgeProp, 28 December 2022.