KUALA LUMPUR: KUB Malaysia Bhd will be focusing on midstream liquefied petroleum gas (LPG) business, from downstream currently, as the group moves up the value chain.
Chairman Datuk Seri Johari Abdul Ghani said KUB was finalising a deal with Singapore's BB Energy (Asia) Pte Ltd to directly import LPG from the latter.
Johari said the partnership was expected to be finalised in the next few months.
He said once finalised, the company would be investing RM250 million to build two refrigerated LPG storage with a capacity of up to 25,000 tonnes.
"We are currently undergoing transformation and the goal is to move up the value chain through the midstream LPG business."
He added that in the past, KUB was only involved in the downstream business, doing bottling for LPG for industrial and household customers under the brand Solar Gas.
"For downstream business, we are currently consulting another LPG pressurised terminal to increase our capacity.
"The ones that we have now, of two LPG pressurised sphere storage, have the capacity of 3,000 tonnes," Johari told reporters after receiving the Excellence Award for Corporate Governance (CG) Disclosure from the Minority Shareholder Watchdog Group (MSWG) on behalf of KUB here last Friday.
Johari is KUB's largest shareholder with a controlling stake of 32.96 per cent.
He said besides that, the group was working towards exiting the plantation business by end of 2021.
He said the group was now left with three plantation assets in Sabah and Sarawak to dispose.
The total disposal for non-core assets will amount to over RM400 million, which will be utilised for its midstream LPG business.
Earlier in June, KUB entered into a conditional sale and purchase agreement with Beradin Plantation Sdn Bhd to dispose of two oil palm estates measuring an aggregate of 2,656.16 hectares for RM158 million cash.
The two estates, namely the Kahang estate and the Sungai Yong estate, together with all buildings and infrastructure as well as plants and crops on them, are collectively referred to as the "Kubah estate"
In a filing to Bursa Malaysia, KUB said the disposal represented a premium of RM2 million, or 1.3 per cent above the market value of the Kubah estate.
The proposed disposal is expected to be completed in the fourth quarter of 2020.
KUB has been disposing its non-core business since 2018, in its bid to improve cash flow.
In September2019, the group disposed some of its investment properties and food and beverage business, A&W Malaysia.
KUB sold its entire stake in A&W Malaysia for RM34 million to Inter Mark Resources Sdn Bhd last September.
For the six months ended June 30, 2020, KUB returned to the black with a net profit of RM33.38 million from a net loss of RM9.22 million recorded in the same period a year ago.
Despite the weak business performance from almost all of its business divisions, the group was able to record a net profit during the first half due to a gain on disposal of KUB-Berjaya Enviro Sdn Bhd (KUBE) of RM31.4 million.
In June this year, KUB disposed of its 40 per cent stake in KUBE to Berjaya Group Bhd for RM80 million.
Its revenue in the same period decreased 15.6 per cent to RM171.69 million from RM203.48 million, largely due to the depressed global oil market and the imposition of the Movement Control Order (MCO) by the government to curb Covid-19 pandemic.
On Friday, KUB's share price was down four sen, or 6.2 per cent, to close at 60.5 sen.