SMIB eyes property market in China
Posted on | July 5, 2007
By THE STAR JOHOR BARU: South Malaysia Industries Bhd (SMIB) plans to expand its property development activities overseas to improve its earnings in the long term. Chairman Tan Sri Mohd Ramli Kushairi said the move was necessary as it was becoming more difficult to get good pieces of land especially in the Klang Valley. He said SMIB would target foreign markets where there was growing demand for residential and commercial properties. “We are thinking of going to China where the margins are good but the company is not setting any time frame,” Ramli told StarBiz recently. Shanghai would probably be the first choice for SMIB’s mixed property project in China due to its rapid growth. Ramli said the company would also be looking at second-line cities as they offered good opportunities for property developers. He said local and foreign developers needed big capital to enter the Chinese property sector and SMIB might be part of a consortium to take part in the sector. Ramli pointed out that the rules were different now and stricter – foreign developers planning to enter the property sector must have partners with existing or on-going projects. Alternatively, developers had to propose projects to the local authorities before they could set up a company to start property development projects. Meanwhile, executive director Peter Leow said despite the strict rulings, SMIB was still keen to go to China where it had good business contacts. He said rules were changing all over the world, not only in China and the Chinese government’s move was to protect the interests of local companies. Leow said even in Malaysia, the Government had relaxed property rules to attract more foreign buyers. The company was willing to offer the 730 acres it owned in Simpang Renggam to be developed into a high-technology park as proposed by the Government. The land, which formerly housed the Johor Safari Park and located about 20 minutes’ drive from the Simpang Renggam toll exit, should be a good choice for the park. For the financial year ended Dec 31, 2006, SMIB’s revenue dropped to RM144.14mil from RM183.08mil in 2005. Its pre-tax profit declined to RM5.6mil from RM12.8mil previously.
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