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Friday, November 23, 2007

Paos gets go-ahead to invest in properties

The move to invest in property was an opportunity that Malaysia's largest soapmaker, Paos Holdings Bhd, could not pass up, a director said.

"It was a rare opportunity which we cannot turn down as the property in this location is experiencing rising demand for office space," executive director Lim Poh Seong said.

Yesterday, its shareholders agreed to let Paos buy Komplex Selangor, Hotel Furama and a single-level basement car park for RM48 million.

These two buildings are located along Kuala Lumpur's Jalan Sultan, is in the Bukit Bintang area.

Komplex Selangor comprises a three-storey retail podium, a 13-storey office block and retail lots.

Having ceased operations in 2005, the 30-year-old Hotel Furama consists of 101 guest rooms, a function room and cafeteria.

"This is not a move away from our core business in contract manufacturing, it is a move to diversify earnings."

Asked if there are plans to refurbish and reopen Hotel Furama, he replied, "The current rental yield of office space and retail lots is close to four per cent.

"We have plans to improve yield to seven per cent. This sale and purchase deal will be completed by March next year and we'll need to refurbish the budget hotel. Therefore, the earliest the hotel can re-open for business would be in 2009," he added.

Lim was speaking to reporters after the company's shareholders meeting held in Petaling Jaya yesterday.

Also present at the press conference were executive directors Lim Chang Ching and Alice Boo Miau Li.

On Paos' core business in contract manufacturing for Johnson & Johnson Pte Ltd, Kao Corp of Japan and Reckitt Benckiser, Lim said the group wants to offer similar services to other multinational companies.

Paos, set up in 1987, has two factories - soap production and oil packaging - are carried out at a 2.43ha facility in Shah Alam, while specialty fats and animal feeds are produced at its 1.22ha plant in Banting, Selangor.

In view of rising fuel and raw material prices, Lim is cautiously optimistic of the prospects for Paos next year.

By New Straits Times (By Ooi Tee Ching)

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