DBE to venture into property development
PETALING JAYA: Integrated poultry company DBE Gurney Resources Bhd is planning to go into property development as the loss-making company seeks to return to profitability.
In a Bursa Malaysia filing yesterday, DBE announced that it will undertake a proposed joint development with Misi Jutari Sdn Bhd for the construction and development of a mixed development project across 3.77ha of freehold land in Bota Kanan, Seri Iskandar, Perak, with a gross development value (GDV) of RM24.5mil.
The project is targeted to make a RM7mil profit.
Under the proposed joint development, DBE and Misi Jutari will be entitled to a respective 75% and 25% share of the net profit attributable to the mixed affordable development project, which comprises 10 units of single-storey semi-detached houses, 85 units of single-storey terraced houses, three units of double-storey shophouses and 16 units of single-storey shophouses.
DBE said the proposed diversification was consistent with the group’s intention to diversify its revenue and income stream to mitigate the risk of over-dependence on the existing business.
Presently, the core business of DBE entails operating an integrated poultry broiler farm, processing plant, feeds production and training in related farm products and materials.
DBE executive director Datuk Doh Jee Ming said the proposed joint development was part of DBE’s business strategy to diversify from the existing poultry business into the property development industry, whereby it is expected to have strong growth prospects, particularly in the residential sector.
“We believe demand for property will continue to increase as property buyers are constantly looking for new developments that fit their requirements. Hence, it is important for us to strategise our products to provide for market needs to remain competitive. “We also intend to diversify into the construction-related business to complement property development, where we shall undertake the construction works of identified projects or contracts to be procured from time to time,” Doh said in a statement.
Doh has close to two decades of experience in property development and construction.
DBE is also proposing a variation whereby the balance unutilised proceeds previously raised through the issuance of RM50mil redeemable convertible notes, is to be reallocated to finance the Bota Kanan mixed development project as well as to fund future procurements of new land banks or projects.
The unutilised proceeds amount to RM12.56mil, originally earmarked for the group’s existing poultry business.
“DBE also plans to venture into the affordable housing market segment.
“We are confident it will contribute positively to the overall profitability and growth of the enlarged business activities of the company.
“As such, we will be seeking approval from our shareholders for the proposed diversification at an EGM to be convened, while the current existing business will continue its operations in the same manner,” added Doh.