A WHOLLY-OWNED subsidiary of Yongnam Holdings is buying three parcels of industrial land in Johor for RM46.7 million (S$15.6 million) in order to move its factory operations there.
In an exchange filing on Monday evening, the group said it has been experiencing higher fabrication labour costs at its Singapore factory over the years, and intends to move most of its factory operations to Malaysia.
"This move is expected to result in cost savings in fabrication labour cost for the group as well as other ancillary staff costs such as accommodation and transportation," it noted.
Another benefit from the move is the freeing up of more "man-year entitlement" from factory workers, allowing the firm to reserve them for site construction workers. "This will in turn reduce foreign-worker levies to be paid in Singapore," it added.
The three adjoining lots of freehold industrial lands in Ulu Choh, Pontian, stretch across 10.3 hectares, and is currently owned by Vee Sen Property Sdn Bhd. The purchase will be funded with internal resources and bank borrowings, according to Yongnam.