Jag to diversify into property development

PETALING JAYA: Electronic waste-recycling company Jag Bhd has proposed to venture into property development and property investment to diversify its revenue sources and earnings, as well as to reduce the group’s reliance on its recycling business.
Jag told Bursa Malaysia yesterday that its subsidiary Jag Land Sdn Bhd has submitted a development order to the local council, for a proposed mixed development on its land in Klang, Selangor, comprising shop offices, office suites and residential apartments.
The proposed development project has an estimated gross development value of between RM155 million and RM170 million (subject to economic conditions) with an estimated gross development cost of RM135 million and an estimated gross development profit of between RM20 million and RM35 million.
Jag said the development order was approved on Nov 23, 2016 and is valid for a period of 12 months.
The group explained that it is in the process of preparing the submission of the building plans for approvals by the relevant authorities which is expected to be submitted in the second quarter of 2017.
Jag said it expects the property business to potentially contribute at least 25% or more of the group’s net profits, noting the group will continue to seek for more property development projects in the future.
In addition, the group said it is in the midst of exploring, discussing and negotiating with other parties for Jag Land to acquire more lands and/or to undertake other property development projects via joint ventures.
Notwithstanding the proposed diversification, the group said it intends to continue with its existing business in largely the same manner.
The proposed diversification is subject to the company’s shareholders approval at an EGM to be convened.
Jag’s core business is in recycling and manufacturing activities of extraction, production and refinery of ferrous, non-ferrous and precious metals via the recovery and reclamation of industrial and electronic waste and the trading of ferrous and non-ferrous metals.
It is also involved in the business of computer software development, maintenance and support services.