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Thursday, October 25, 2007

Astral Asia to start on high-tech park

By The Star

Firm hopes project will be endorsed by Federal Government

KUALA LUMPUR: Astral Asia Bhd is ready to embark on the development of its proposed Kuantan High-Tech Park after Prime Minister Datuk Seri Abdullah Ahmad Badawi launches the East Coast Economic Region (ECER) next week.

The company hoped that the project, a joint venture with a Pahang state agency, would be endorsed by the Federal Government as a component of the ECER, Astral Asia deputy executive chairman Datuk Lim Kang Poh told StarBiz yesterday.

Abdullah is expected to launch the ECER in Kelantan and Terengganu on Monday and in Pahang the next day.

The Federal Government would back projects in the ECER with tax incentives, and new or upgraded infrastructure such as highways, utilities and expansion of ports and airports costing billions of ringgit. Such stimuli would kick-start the projects.

Astral Asia is keenly awaiting the range of incentives for the ECER before it starts marketing the land in the high-tech park to manufacturing companies.

Datuk Lim Kang Poh with a map of the proposed joint-venture Kuantan High-Teck Park

The firm told Bursa Malaysia last week that its subsidiary, Syarikat Ladang LKPP Sdn Bhd (SLLKPP), had received approval in principle from Lembaga Kemajuan Perusahaan Pertanian Negeri Pahang (LKPP) for its proposed high-tech park project. LKPP is chaired by Pahang Mentri Besar Datuk Seri Adnan Yaakob while its board comprises several senior state government officials.

Astral Asia's architect was drawing the park's layout plans for submission to the state authorities within a month, Lim said.

The company will use SLLKPP's oil palm estate to develop the proposed high-tech park in phases over the next 15 years. The estate is leased from LKPP.

Broadly speaking, the Kuantan High-Tech Park would be similar in concept to the Kulim High-Tech Park where, Lim noted, all the industrial land had been sold.

The project is particularly feasible for Astral Asia because the group already holds the land. “We don't have to go out to buy the land that can cost millions,” Lim said.

Astral Asia would be able to finance the development of the project as it had RM26mil in cash and its borrowings were less than RM600,000, he added.

The proposed high-tech park would be sited on the 1,873-acre estate in the mukim of Kuala Kuantan. “That is one of our estates. All in, Astral Asia has about 10,000 acres of oil palm plantations, and we manage further 5,000 acres on a profit-sharing basis,” Lim said.

The estate to be developed into a high-tech park was valued in the company's books at about RM20,000 per acre. When the land use is converted from agricultural to industrial, it is believed that the land value could appreciate by more than 10 times.

The project's planners have noted that Pahang has a couple of clusters of specialised activities. The Pekan area, for instance, is focused on the automotive industry and the Gebeng area concentrates on the petrochemical industry.

The planners have, therefore, proposed to attract companies in the medical and pharmaceutical equipment industry to locate their plants in the high-tech park, which would become a medical industrial hub.

They would also seek Multimedia Super Corridor status for the high-tech park as it would attract some companies in the medical industry that could qualify for the status, Lim said.

He said the high-tech park project was timely for Astral Asia as the oil palm trees on the estate involved were about 25 years old, and if the company did not convert the estate into an industrial venture, it would have to incur a lot of cost to replant the trees, Lim said.

There has been some interest in Astral Asia shares following its announcement of the high-tech park project, with its share price rising 17 sen on Tuesday and gaining a further five sen to RM1.55 yesterday.

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