Straits Trading and MSC Properties, which is a wholly owned subsidiary of Malaysia Smelting, signed a memorandum of understanding (MOU) to jointly explore options for their neighboring land in Penang.
Malaysia Smelting (MSC), which is a 54.8 percent-owned subsidiary of Straits Trading, is relocating its smelting operations from Butterworth, Penang, to a new plant in Pulau Indah, Klang, with production at the Penang plant to be gradually phased out, it said in a filing to SGX after the market close on Thursday. The full migration is expected to be completed by 2020, it said.
The tin smelting plant is located on 13.9 acres of land, while Straits Trading owns neighboring land of 26.2 acres, creating a sizeable plot of 40.1 acres, it said.
“The property landscape of Butterworth has changed tremendously over the years and we believe that the time now is right for us to look at opportunities to unlock the value of our land,” Chew Gek Khim, executive chairman of Straits Trading and chairman of Malaysia Smelting, said in the statement.
“This MOU between Straits Trading and MSC to foster collaboration on our land will be mutually beneficial in securing a better outcome and maximising the returns for both parties,” she added.
The Butterworth property is within five to 10 minutes drive to the upcoming Penang Sentral, a multi-billion ringgit integrated transportation hub connecting railway, ferry and bus services for the state of Penang, it said.
“From a predominantly industrial area, Butterworth is evolving into an attractive location for residential and commercial developments, considering the spillover development on Penang Island into the mainland,” Patrick Yong, CEO of MSC, said in the statement.
He also pointed to the Penang transportation master plan as set to encourage more Penang residents to live and work on the mainland amid spillover development from Penang Island.