KUALA LUMPUR (April 2): JHM Consolidation Bhd is buying a factory in Kedah for RM16.6 million cash as part of the group’s plan to expand its production area.

The group signed a sale and purchase agreement with Bernas Wirama Sdn Bhd today, said JHM in a Bursa filing.

“The acquisition will enable JHM Group to expand the production floor in order to increase its production capacity. The board views it as a strategic move for the JHM Group to own the property, to improve and enhance operational efficiencies in the long term. Cost reduction is expected to be derived from the efficiencies achieved,” the group said.

The acquisition will not have any material effect on the net assets of the group and is not expected to have any material effect on the gearing of the group for the financial year ending Dec 31, 2019.

It is expected to be completed within four months.

JHM closed three sen or 2.38% higher at RM1.29, for a market capitalisation of RM719.3 million.