13-07-2005: Latitude Tree, CIMB to make furniture parts in Thailand

Latitude Tree Holdings Bhd (LTHB) has entered into a joint venture (JV) with CIMB Bhd subsidiary CIMB Private Equity Sdn Bhd and Konsortium Kontrak Sdn Bhd (KKSB), to set up a 310 million baht (RM28.15 million) factory to make furniture components in Thailand.

It expected the JV company GROB HOLZ Co Ltd (GHCL) to start production in May next year, with a planned capacity of 4,500sq metres per month in the second year.

"Based on current market prices, annual turnovers are estimated to be in the region of RM70 million, with about 50% of these sales expected to be made to the LTHB group at prevailing market rates," LTHB said in a press statement on July 13.

LTHB's subsidiary GROB HOLZ Sdn Bhd will have a 51% stake in the JV, while CIMB and KKSB will have 34% and 15%, respectively. The JV's paid-up capital will total 200 million baht.

"The operations of GHCL are expected to be significant revenue driver for the LTHB group from its second year of full operations onwards. It is anticipated to achieve a net profit margin of about 9% to 10% from the second year."