The machinery to be acquired comprises one second-hand corrugator for board production; six second-hand printing machines with in-line features and one second-hand roller conveyor system for the China operation, as well as one second-hand die-cutter and one second-hand printing machine for the Singapore plant. All the equipment will be used for the Group’s core business, which is the manufacture of corrugated paper products. The acquisition is expected to result in an increase in the Group’s production facilities and enhance its productivity.
The Tat Seng Board says the acquisition will enable the Group to produce better quality boards at lower cost and thereby to improve its competitiveness.
The new corrugator will increase the capacity of the China plant by approximately 90,500 metric tons from the present production capability of 20,895 metric tons per annum. The machinery for the China plant is expected to be commissioned in December 2003 and fully operational by March 2004. The machinery for Singapore plant is expected to be commissioned by the end of August 2003 and operational by October 2003. The new machinery will increase the converting capacity of Singapore plant by about 20 per cent.
The acquisition is not expected to have a significant impact on the performance of the Group for the financial year ended 30 June 2003. There will not be any significant impact on the earnings per share of the Group as well as the net tangible assets per share of the Group for the financial year ended 30 June 2003.
The acquisition is to be funded by internal resources of the company. The purchase price will be settled by way of cash for the lump-sum amount of US$4million.
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