KUALA LUMPUR (Feb 19): Aluminium extruder PA Resources Bhd is buying two parcels of adjoining industrial land in Kuala Selangor for a total of RM21 million to build a new factory that would increase its production capacity.

In a filing with Bursa Malaysia on Monday, PA Resources said its wholly-owned PA Extrusion (M) Sdn Bhd had inked two sales and purchase agreements with Niken Steel (M) Sdn Bhd to buy the two vacant leasehold plots that measure a collective 72,840 sq ft. The leases of both parcels of land are expiring on Jan 23, 2096.

PA Extrusion is an aluminium extruder that engages in fabrication and related services.

PA Resources said the proposed acquisition is part of the group's expansion objective as its existing factory nearby is operating at near full capacity. The new factory is expected to raise its production capacity from 3,200 tonnes a month to 7,000 tonnes a month in phases.

"This expansion is mainly into upstream and downstream of the existing business," it added.

PA Resources said it will seek financing from financial institutions to satisfy up to 80% of the total purchase price of RM21 million, while the remaining 20% will be financed using internal funds.

PA Resources shares closed 0.5 sen or 1.39% higher at 36.5 sen on Monday, giving it a market capitalisation of RM545.15 million. Year to date, the counter has jumped 35.19% from 27 sen at the start of the year.