YKGI, Ajiya ink deal for partnership in East Malaysia

PETALING JAYA: YKGI Holdings Bhd, whose net profit jumped 51 times for the first quarter ended March 31, 2018, has inked a subscription cum shareholders agreement with Ajiya Bhd to form a joint venture (JV) company known as Asteel Ajiya Sdn Bhd in East Malaysia.
This follows the memorandum of understanding (MOU) entered by the two parties in October 2016. YKGI and Ajiya will own 60% and 40% equity interest each in the JV entity, which is expected to commence business in the second quarter of 2018.
The proposed JV will involve the manufacturing and sale of safety glass, supply and installation of Ajiya Green Integrated Building System (AGiBS) and trading of metal door frame, window frame, metal ceiling and sunshade products in East Malaysia.
YKGI's wholly owned subsidiary ASTEEL Resources Sdn Bhd is involved in the manufacturing and selling of roll-formed products and trading in hardware and building materials in East Malaysia. Ajiya manufactures safety glass and metal roll forming products including AGiBS.
YKGI said the proposed JV enable the group to expand its product range in East Malaysia, while Ajiya could extend its market reach by leveraging on YKGI's extensive business network in East Malaysia.
Separately, YKGI saw its first-quarter surge to RM4.14 million from RM81,000 a year ago, aided by unrealised forex gain of RM4.09 million.
However, its revenue decreased 3.19% to RM97.41 million compared with RM100.62 million in the corresponding quarter, as a result of soft market demand.
YKGI foreses the flat steel market to remain sluggish and challenging and it is is committed to carrying out plans to restructure the coil business while focusing on the downstream business.
YKGI's share price fell 2.3% to close at 21.5 sen, while Ajiya slipped 2.9% to 50 sen.