KUALA LUMPUR: Ornapaper Bhd has unveiled its recent expansion into property development and investment, with expectations that it will contribute 25 per cent or more to its future net profit.
While upholding its core focus on manufacturing corrugated boards, carton boxes, and paper-based stationery products, the company has actively pursued new business ventures to diversify its income streams and lessen its reliance on its current operations.
In the preceding year, its wholly owned subsidiary, Ornapaper Industry (M) Sdn Bhd, inked sales and purchase agreements with Faithview Group Development Sdn Bhd to acquire two leasehold vacant lots valued at RM30.75 million. These land parcels, located in Mukim Krubong, Melaka, were procured for RM18.52 million and RM12.23 million, respectively.
Ornapaper disclosed to the stock exchange that the proposed acquisition offers an opportunity for the group to expand its landbank at an appealing price for long-term investment goals.
"Melaka Tengah is the centre of Melaka's business district and a hub for property development. Other than the tourism industry, the industrial sector is the main catalyst for development and thus, boosts the residential and commercial sectors, which are expected to remain stable in terms of existing and incoming supply," it said.
Ornapaper said that the proposed diversification into property development and investment will promptly come into effect upon securing approval from its shareholders at the forthcoming extraordinary general meeting.
Additionally, it was disclosed that Ang Kwee Teng, the group's executive chairman, will spearhead the property business.
In the financial year ending Dec 31, 2023, Ornapaper's net profit surged to RM6.57 million from RM2.48 million in the preceding year, primarily due to reduced material costs.
However, revenue witnessed a decline of 15.36 percent, slipping to RM278.39 million from RM328.93 million, primarily attributed to the decreased average selling price of its products.
