Super Coffeemix, Sam Goi in China property venture

Super Coffeemix Manufacturing has formed a joint venture (JV) with popiah king Sam Goi and Peter Chang to undertake a commercial property development project in China. Under the agreement, the JV will purchase four pieces of land in Jiangsu province for some US$106 million.

In a statement yesterday, Super Coffeemix said it has forged a tie-up with Mr Goi and Mr Chang for the project in the city of Changzhou. The joint venture will be formed through Super Malikha Pte Ltd (SMPL), which is wholly owned by Super Coffeemix, and will have a paid-up capital of $2 comprising two ordinary shares. Additional shares will be allotted to Mr Goi and Mr Chang so that all partners will have an equal stake in the firm.

After the JV is formed, SMPL is expected to establish a foreign investment enterprise in Changzhou city with a registered capital of US$99.98 million - to be contributed equally by the partners.

In addition, SMPL will also ink a cooperation contract with a Chinese enterprise, under which the latter agrees to secure the sale of four pieces of land in Changzhou, totalling 2,100 mu (1.4 million sq m), to the foreign investment enterprise for the project’s development. The cost of the acquisition is estimated at US$106 million.

As part of the deal, SMPL will also form a 25:75 joint venture with the Chinese party through its foreign investment enterprise. This is for the purpose of undertaking the development of a theme park and holiday facilities on part of the four pieces of land. The proposed equity joint venture is subject to parties entering into an equity joint venture contract on terms to be mutually agreed.

For the year ended Dec 31, 2006, Super Coffeemix reported a net profit of $24.6 million on a 12 per cent rise in turnover to $210.69 million. The group’s profit was also helped by the higher other income of $8.1 million mainly due to fair value gain on quoted equity investments of $4.5 million, gain on disposal of quoted equity investments of $1 million and foreign exchange gain of $700,000.

Super Coffeemix expects better profits in FY07, and has also set a target of double-digit topline growth over the longer term.

Source: The Business Times, 17 April 2007