MAG Holdings Bhd is set to invest SGD 6,1 million (EUR 4,3 million /USD 4,7 million) to acquire a 50% stake in Lim Shrimp Aquapolis Pte Ltd (LSA). Furthermore, they will form a joint venture with PT Gerbang NTB Emas (PT GNE) for shrimp cultivation and processing on Sumbawa Island in Indonesia.
According to a statement covered by The Edge Malaysia, MAG Holdings, a company that produces aquaculture-based food, signed a term sheet with Lim Shrimp Organisation Ltd (LSOL), in which it would have an equity stake.
LSOL is mainly engaged in the operation of fish farms and fish slaughterhouses, while LSA offers management consulting services and the development of aquaculture municipalities.
Given these characteristics, the two companies agreed with deficit backing. LSA thus aims to generate an annual net profit of a minimum of SGD 2 million (EUR 1,3 million/USD 1,4million). To generate this amount, the company would have four years from the start of operations. However, in default, LSOL undertakes to cover any shortfall in total net profit during the period.
This is not MAG Holdings' only project. Following its association with PT GNE, a PMA company will be formed in Indonesia, in which LSA will have a 20% shareholding.
MAG Holdings executive chairman Ng Min Lin told The Edge Malaysia that this plan was in response to its intention to expand its presence in the shrimp farming industry outside Malaysia, precisely through its latest investment and partnership. "This move underscores our belief in the industry's potential and reaffirms our commitment to achieving tangible growth and offering sustainable value to our shareholders," he said.
Under the agreement reported by The Edge Malaysia, PT GNE will obtain exclusive licensing rights from the province of West Nusa Tenggara (NTB) to develop and operate a shrimp processing and cold storage plant on the island of Sumbawa.
PT GNE will finance 50% of the total project cost through NTB Bank. Additionally, they will ensure that the PMA company receives tax-free status for three years, starting from the commencement of commercial operations. PT GNE will also handle all required permits and provide the necessary infrastructure to ensure the seamless functioning of the operations.
Furthermore, PT GNE will facilitate the upgrade of the Pelabuhan Badas port to handle 20-foot refrigerated containers with export capacity.
In partnership with MAG Holdings, it will process shrimp for export to markets. Some of them will be the U.S., EU, China, and Australia.
MAG Holdings Berhad is a listed aquaculture-based food producer on the ACE Market of Bursa Malaysia Securities Berhad. Formerly known as Malaysian Aquaculture Group, the company changed its name to align with its primary business in aquaculture. It was originally incorporated in Malaysia in 2004 as Key West Global Telecommunications Sdn Bhd. Although, later became XingHe Holdings Berhad after acquiring Supreme Global Group Limited in 2014. In 2019, the company diversified into prawn aquaculture in Malaysia, acquiring two significant prawn aquaculture farms.
PT. Golden NTB Gate actively supports the development of Indonesia, particularly in the West Nusa Tenggara Province. As a regional-owned company, it focuses on building economic infrastructure and fostering the well-being of the people. With a vision of independence and progress, PT. Golden NTB Gate plays a vital role in contributing to the ongoing development efforts in the region.
LIM Shrimp Organization of Malaysia is a social enterprise developer that helps developing nations establish sustainable livelihood programs. In particular related to shrimp farming, to promote economic growth and improve quality of life.