PETALING JAYA (July 6) — Berjaya Property Bhd is expanding beyond its traditional property business by entering the automotive manufacturing sector through an RM813.35 million joint venture with Trusmax Investment Co Ltd, a wholly owned subsidiary of China's Wanli Tire Co Ltd.
The partnership will establish a new joint venture company in Malaysia to undertake the research, development, design, manufacturing and sale of automotive tyres, together with related components and after-sales services.
Strategic Land Contribution Forms Part of the Investment
As part of the agreement, Berjaya Property, through its wholly owned subsidiary Alam Baiduri Sdn Bhd, will contribute a 67.90-acre freehold land parcel located in Mukim Sungai Tinggi, Ulu Selangor.
The land forms part of a larger 372.55-acre agricultural estate acquired by the group in 2017 and is currently used as an oil palm plantation. It has been assigned an agreed value of RM118.31 million, reflecting its book value as well as estimated costs for land conversion, subdivision and construction works to prepare the site for industrial development.
RM1.30 Billion Manufacturing Project
The joint venture will have a total equity investment of RM813.35 million, with Trusmax holding a 70% stake and Alam Baiduri retaining the remaining 30%.
Trusmax will contribute RM569.34 million in cash, while Berjaya Property's investment will comprise RM125.70 million in cash together with the land contribution valued at RM118.31 million.
The overall project is expected to cost approximately RM1.30 billion, with around 63% funded through equity and the remaining 37% financed via borrowings.
Berjaya Property's total financial commitment, including its cash investment and land-related obligations, is estimated at approximately RM185.70 million, which will be financed through internal funds and group-level borrowings.
Partnering with an Established Tyre Manufacturer
Trusmax is a wholly owned subsidiary of Wanli Tire Co Ltd, a state-owned Chinese tyre manufacturer with extensive experience in tyre research, development, manufacturing and sales.
By partnering with Wanli, Berjaya Property aims to leverage its partner's advanced manufacturing technology, technical expertise and established industry experience, allowing the group to diversify into a new industrial sector with lower execution risk.
Limited Immediate Financial Impact
The company expects the joint venture to have no immediate material impact on its earnings, net assets or shareholding structure during the initial stages.
However, once manufacturing operations commence, the project is expected to contribute positively to the group's long-term financial performance while broadening its business portfolio beyond property development.
Industry Insight
The joint venture reflects a growing trend of Malaysian property companies diversifying into industrial and manufacturing sectors to create new income streams. It also demonstrates Malaysia's continued ability to attract foreign direct investment from global manufacturers seeking to establish production facilities in the country. Strategic partnerships between local companies and experienced international manufacturers enable technology transfer, industrial development and long-term economic growth while reducing operational risks for new market entrants.
Key Takeaways
This article taught me that property developers can diversify their businesses beyond real estate by forming strategic joint ventures with experienced international companies. I learned that land can be used as an equity contribution in a joint venture instead of only being sold for cash, allowing companies to participate in future business growth while making use of existing assets. The article also highlights the importance of partnering with established manufacturers to gain access to advanced technology, technical expertise and operational experience. Most importantly, I learned that business diversification helps companies create new sources of revenue, reduce reliance on a single industry and strengthen their long-term growth prospects.
Yao Mu Realty, based in Kuala Lumpur, Malaysia, specializes in industrial real estate for factories and land, delivering professional and efficient solutions.
Posted by Yao Mu Realty Sdn Bhd on 6 Jul 26
Malaysia