PETALING JAYA (Nov 4, 2012): Freight Management Holdings Bhd (FMH) is buying a 25% stake in a Thai shipyard for RM2.5 million cash.

The logistics group had on Oct 31 2012 entered into an agreement with YKP-FM Global Shipyard Co Ltd for the proposed acquisition.

The other shareholders in YKP-FM are Thai investors, with a combined stake of 70%, and another Malaysian investor who owns the remaining 5% stake.

YKP-FM's core business is the development and operation of a shipyard, which will focus on the repair and maintenance of vessels such as tugboats, barges and other types of boats.

YKP-FM has identified strategic land in Kantang, Trang Province, Thailand, which is suitable for the development of a ship-repair yard, and will construct a dedicated facility with a planned capacity to handle up to 10 vessels concurrently.

"Our investment in YKP-FM represents a strategic move to further strengthen our logistics-related businesses. In particular, it is synergistic to our tug and barge operations under our 51%-owned unit TCH Marine Pte Ltd, which has existing business activities in Kantang," FMH group managing director Chew Chong Keat said in a statement on Friday.

"We have the necessary experience and expertise, and are confident that we will be able to contribute significantly to the growth of YKP-FM."

Chew also said there are more than 5,000 sets of tugboats and barges in Asean, of which an estimated 1,500 sets ply the Straits of Malacca.

"As such, there is potentially a sizeable number of vessels that would require the services of YKP-FM's shipyard.

"Additionally, YKP-FM will have the advantage of a large land bank to site the yard, which is not only geographically conducive, but can be acquired at a relatively low cost compared with Malaysia and Singapore," he added.