Majuperak looking to diversify income streams

By Sharen Kaur
Published in NST on April 15, 2014

EXPANSION: Firm eyes ventures, such as in energy sector, that can provide good returns

 MAJUPERAK Holdings Bhd, which is involved in the manufacture of bamboo-based products, is looking to venture into the energy sector so as to become a larger and more profitable entity.

Majuperak, which is majority controlled by Perbadanan Kemajuan Negeri Perak (PKNP), a state incorporated body under the Perak State Development Corp, is involved in property development, renewable energy and palm oil plantation.

The company posted a pre-tax loss of RM2.61 million in fiscal year 2013 compared with a net profit of RM3.7 million in 2012, mainly because of a big fall in revenue.

Majuperak’s revenue in the same period was RM10.22 million, almost three times less than the RM32.11 million achieved the year before.

Its revenue last year was mainly derived from land sale in Manjung and Manong, Perak, amounting to RM3.28 million, and property income in Langkap, Tanjung Tualang, Ipoh and Batu Gajah (all in Perak).

Its chairman Tan Sri Megat Najmuddin Megat Khas said Majuperak is looking at new businesses that are able to provide good returns.

These include alternative energy, mini-hydro power plants and solar power, he said.

“We are looking at the energy sector, but in a small way first, to test the waters. We are currently building a solar farm in Perak. We expect it to be operational by the middle of this year. Once it starts operating, we will expand our interest in this sector, albeit cautiously,” he said.

He said moving forward, Majuperak will not only focus on property development but other potential profitable businesses as well.

Majuperak has a few joint-venture (JV) projects, which are expected to contribute to the company’s earnings starting this year.

They include its RM800 million property development with Xtreme New Sdn Bhd.

Based on the supplemental agreement inked last February between the JV partners, Majuperak will receive RM37 million in cash and RM8 million in property assets from the project.

For its bamboo business, the company has a concession to extract bamboo from Hutan Simpan Hijau in Hulu Perak. Its factory is located at the Bandariang Industrial Area in Gerik.

The initial cost for the project is RM7.5 million, and together with its partner Tetap Murni Sdn Bhd, they will produce bamboo products such as toothpicks, skewers, chopsticks, blinds, bio char, pulp and activated carbon.

“We are re-aligning things in Majuperak. I am very confident that the company will perform better,” he said.

For future funding of projects, he said the company will look at all fund-raising options.

Majuperak chairman Tan Sri Megat Najmuddin Megat Khas says the company is looking at the energy sector, but in a small way first, to test the waters.