Asia Poly to acquire 30% stake in competitor GB Plas

PETALING JAYA: Asia Poly Holdings Bhd has entered into a heads of agreement with Gooi Chin Hooi to acquire a 30% stake in GB Plas Sdn Bhd for RM15 million.

GB Plas is a manufacturer and exporter of extruded acrylic and plastic sheets. For FY19 and FY18, the group posted revenue of RM52.2 million and RM65.8 million respectively.

Upon the completion of the proposed acquisition, GB Plas will be an associate company of the group.

The proposed acquisition, which is expected to be completed by first-quarter 2021, will be financed via internally generated funds and it is expected to contribute to the earnings of Asia Poly from FY21 onwards.

Asia Poly executive chairman, Datuk Yeo Boon Leong commented that the acquisition will enable the two to strengthen each other’s presence in their respective key markets, Southeast Asia where GB Plas is active in, and the US and Europe for Asia Poly.

“The synergistic relationship between these two companies will also be explored in regard to R&D for the usage of acrylic sheets and plastic sheets in other applications, such as solar panels,” he said in a press release.

Yeo also said that with Asia Poly’s production line already running at full capacity, the acquisition will provide an immediate expansion opportunity as GB Plas is operating at a utilisation rate of 50-60%. “This boosts our initial plan of doubling up our production capacity to 1,600 tonnes per month by September 2021,” he said.

GB Plas managing director, Gooi Chin Hooi revealed that he has seen rising demand for extruded acrylic and plastic sheets in Asia, the US and European markets. In fact, Asia Poly is anticipating a large long-term contract from a US customer, which the group is currently in advanced discussions with.

With the acquisition, Gooi said, it will be able to tap into these markets even more efficiently.

“Just like cast acrylic sheets, we have seen a sharp spike in orders from new customers this year, thus it is important that we capture these market opportunities by having a larger combined presence through this corporate exercise.”