IMPRESSION CITY BY END 2017

Yong Tai Berhad : bullish on Impression City
     
02/24/2016 | 03:12 am
KUALA LUMPUR: YONG Tai Bhd expects its RM5.4 billion project in Malacca to generate net profit margin of 20 per cent, which would help to sustain the company’s earnings in the long term.

The garment maker-turned-property developer, which has been loss- making for several years, expects to return to the black this year with contribution coming from the real estate sector.

The company, which has pockets of developments in the Klang Valley and Johor, is planning to develop Impression City on a 47.03ha site in Malacca.

The project would be developed in 11 phases and over 10 years, said its executive director Boo Kuang Loon.

Construction for Phase 1 would start in the third quarter of this year and feature retail and commercial units, said Boo at a luncheon hosted by MIDF Amanah Investment Bank Bhd, here, yesterday.

It is expected to have a gross development value of RM1.1 billion,

The catalyst for the commercial-led Impression City is the Impression Melaka performing arts theatre, to be built on the 47.03ha site.

Construction of Impression Melaka, the jewel of the company, will start next month at a cost of RM300 million and includes land acquisition. The opening is slated for end-2017.

Boo said although Impression Melaka required a huge capital investment, the returns would be long term and attractive.

It would take two years to construct and the projected returns would start from 2018 onwards, he added.

With 15 million tourists visiting Malacca annually, Yong Tai hopes to attract at least 1.1 million visitors to Impression Melaka, with 40 per cent coming from China.

The company is also targeting visitors from Southeast Asia (30 per cent), Asia (20 per cent) and the rest from the Middle East, Europe and the United States.

“With two shows a day and tickets priced at RM120 per person, we are poised to achieve a revenue of RM140 million a year, including the sale of souvenirs and merchandise. For this business, we are targeting a profit margin of 50 per cent. This would net us a profit of around RM60 million a year.

“There are many more upsides, such as increasing the ticket prices and having up to four shows a day. This is the potential of Yong Tai in the future,” said Boo.

“For the next two years we are at the investing stage and would generate profits. But the profits would not be much to give dividends,” he said.

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Straits of Malacca – The longest Strait in the world

Straits of Malacca is a funnel-shaped narrow waterway of 800 km long that connects the South China Sea and Andaman Sea. The Strait of Malacca is running between Peninsular Malaysia, southern Thailand and Sumatra (Indonesia). The name of the strait came from Malacca Sultanate that ruled the group of islands between 1400 and 1511. The port of Malacca played an important role in trade during 16th and 17th centuries.

The depth of water in the southern side of the street does not exceed 120 feet. Usually, the depth of water is around 90 feet. However, the depth of the water deepens gradually towards the northwestern side and reaches the depth of about 650 feet because the strait join with Andaman Basin.

History of Straits of Malacca

Malacca was an important city situated along the Strait of Malacca during past centuries. Malacca was the major trading port, where sailing vessels loaded with spices from all parts of the world used to come to the harbor. The port was also popular for trading various things such as silk, porcelain, textiles, camphor, sandalwood, mace, cloves, nutmeg, pepper, tin, and gold from various parts of the world. Malacca used to be the safe place as the wind was blowing always towards the right position, so that the sailors can reach the shore safely.

During the 7th century, the Srivijaya Empire based in Sumatra came into power and the empire expanded its power to Java and Malay Peninsula. The Srivijaya Empire gained control in the Strait of Malacca, Sunda Strait and Southeast Asia. The Srivijaya Empire gained military and economic domination along the Strait of Malacca for around 700 years.


Srivijaya enjoyed great benefits through spice trade between Indian, Arab and Chinese merchants. Straits of Malacca helped to establish a sea route for trade between China and India. It continued in later centuries also even after the Malacca Sultanate came into power during the 15th century.

Malacca had faced several conquerors such as English, Dutch, Portuguese, and Chinese during the past centuries. The city of Malacca became prominent for everyone who wanted to rule the Straits of Malacca as the Strait was an important route for spice trading. Hence, Malacca faced so many conquerors from 1400, so that they can reap economic benefits through spice trading.

In the year 1511, Portuguese under the leadership of Alfonso de Albuquerque conquered Malacca. However, the Portuguese could not retain the prosperity of Malacca because of the wars, competition and restrictive policies. They ruled Malacca till the year 1641 because the Dutch East India Company conquered the fort “A Famosa” built by the Portuguese during their reign.

After conquering Malacca, the Dutch rebuilt the fort and also built new buildings. Even though the Dutch constructed new buildings, the trade in Malacca declined during their regime. The Dutch conquered Malacca to eliminate the competitors and ensure safe trade in the spice-route. When the Netherlands was conquered by French in 1795, Malacca was given to the British in order to elude French from conquering the city.

In 1808, the British returned Malacca to Dutch, but the city was soon handed over to the British East India Company again. English East India Company ruled the city since 1826. In 1957, anti-colonial protest culminated and independence was proclaimed by the first Prime Minister of Malaysia, His Highness Tunku Abdul Rahman Putra Al-Haj.


Importance of Straits of Malacca

Strait of Malacca is one of the important shipping channels of the world even now. Strait of Malacca became the shortest sea channel between Persian Gulf traders and Asian traders. Oil containers from the Middle East is transported to the Pacific Rim, South Korea, Japan, and China through the Strait of Malacca. It is the main oil transport checkpoint in Asia as 35% of the all oil containers are passing through the Strait of Malacca. Approximately around 15.2 million barrels of oil are transported through this waterway. Around 90% of the oil transportation consists of crude oil transportation and rest constitutes petroleum products. Every year, more than 60,000 ships pass through the Strait of Malacca.

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