PRECISION plastic components maker Fu Yu Corporation is undertaking a S$15.4 million redevelopment project to expand and improve its operations in Singapore, it said on Wednesday.

Construction works for the group's premises at 9 Tuas Drive 1 (Plot 9) has begun, and is targeted for completion in the fourth quarter this year. The project will be financed by the group's internal funds.

The redevelopment is also in conjunction with the lease renewal of the group's premises at 7 Tuas Drive 1 (Plot 7) and Plot 9 for a further term of 20 years from Nov 16, 2021.

Plot 7 has a land area of 4,756 square metres (sq m), while Plot 9 has a land area of 4,755 sq m.

The project involves the demolition of the existing building and the construction of a larger building to house a factory, warehouse and office space, Fu Yu said.

The new building will have an estimated gross floor area of 9,000 sq m, which is more than three times the size of the existing building. The layout of the new building will also be modified.

As part of the redevelopment project, Fu Yu plans to invest in new manufacturing equipment to expand its production capacity and enhance its capabilities to produce better quality products, it said. Accordingly, the group expects to benefit from higher productivity and operational efficiency.

Fu Yu added that its investment in the redevelopment project is part of its long-term strategy, as Singapore is an "important and growing base for its manufacturing operations".

The redevelopment project is not expected to have any material impact on the company's net tangible assets, or earnings per share for the financial year ended Dec 31, 2019.

Fu Yu shares closed at 24.5 Singapore cents on Wednesday, down 3.9 per cent, or one cent.