KUALA LUMPUR (June 23): Hiap Huat Holdings Bhd (KL:HHHCORP) is buying a 20,000-square-metre industrial land and assets located in Kemaman, Terengganu for RM9.5 million.

The leasehold land, including plant and machinery, is expected to be used for the operation of an integrated low pressure system production and maintenance enterprise, as well as for cleaning and testing of oil wells, and for constructing related buildings, said Hiap Huat in a bourse filing.

Hiap Huat — which is involved in scheduled waste management, manufacture of lubricants and paint products, among others — said the proposed acquisition would expand its customer base to include those serviced by the current assets owner Paka Petroleum Sdn Bhd in receivership.

“This ready-to-use setup offers substantial time savings and efficiency benefits, compared to the alternative of establishing a new facility from the ground up,” Hiap Huat said.

The asset’s “proximity to our existing customers in Paka, Terengganu, will significantly improve response times and enable the provision of higher quality services,” the company said.

Further, the acquisition includes licences approved for handling new types of hazardous waste, which Hiap Huat currently does not possess, it said, noting that the expansion of capabilities is anticipated to open new avenues for business and generate a new stream of income.

A sale and purchase agreement has been signed by Hiap Huat’s wholly owned subsidiary, Relgnite Energy Sdn Bhd, with Paka Petroleum for the proposed acquisition. This proposed acquisition will be funded by a combination of internally generated funds and bank borrowings.

Hiap Huat’s share price was last traded at 12 sen last Friday (June 20), giving the company a market capitalisation of RM48 million.