Formosa Prosonic sells Sungai Petani factory for RM22.1mil, closes the site, moves to Port Klang

Formosa Prosonic Industries Bhd (FPI), the Bursa-listed audio products manufacturer, is selling its factory in Sungai Petani, Kedah, for RM22.1 million cash — and closing the site for good. The sale and purchase agreement, signed 28 August 2026 with Yetta Steel Industries Sdn Bhd, covers FPI's leasehold interest in 39,370 sq m (about 9.73 acres) of industrial land, together with the factory buildings on it.

What's actually on the land

The property comprises five structures, all at Plot 236, 238 & 240, Jalan PKNK 2, Kawasan Perusahaan Sungai Petani (5.6498569803294085, 100.53718146434066) (https://maps.app.goo.gl/LYd7kq97irmoDXq3A) : a single-storey factory with an attached double-storey office (54,211 sq ft), a separate single-storey production factory (65,122 sq ft), a single-storey warehouse (71,946 sq ft, the newest structure at 17 years old), a guardhouse and open-sided parking sheds. Most of the buildings are 26 years old; the site has operated as a factory since 2000.

Against the land size, RM22.1 million works out to roughly RM52 per sq ft — worth holding in mind next to what industrial land fetches in the Klang Valley right now (this newsletter has covered Klang deals transacting well over RM150–300 psf in recent weeks). That gap is most of the story: it's a large part of *why* FPI is leaving Sungai Petani for Port Klang, not just where.

Who's buying it

Yetta Steel Industries — formerly Yet Ta Industries Sdn Bhd — is a small, family-held Sungai Petani manufacturer of metal parts, sheets, steel rod bars, hardware and building materials, with a transport agency business alongside. It's owned by three individuals (Yeoh Kam and Teoh Ching Keat with 30% each, Teoh Cha Hai with 40%) on RM2 million of paid-up capital. This isn't an institutional buyer or a REIT — it's a local operator moving into a larger, purpose-built industrial site than whatever it's leaving behind.

Two ways to read the gain — and they tell different stories

FPI is booking an estimated net gain of RM10.9 million on the sale. That figure is accurate, but it's measured against the property's *depreciated net book value* of RM10.67 million as at 31 December 2025 — not against what FPI actually paid for it.

FPI's real all-in cost, including subsequent capital enhancements, was RM17.67 million (against an original 2015 purchase price of RM15 million). Measured against that number, FPI's actual cash gain over roughly 11 years of ownership is closer to RM4.4 million — a real but far more modest return than the RM10.9 million headline figure suggests.

Neither number is wrong. The RM10.9 million is the correct accounting treatment and what will show up in FPI's earnings. The RM4.4 million is closer to what the transaction actually means in cash-in, cash-out terms. When you're reading any company's disclosed "gain on disposal," it's worth checking which of these two you're actually looking at — accounting gains against book value routinely look far larger than the real economic return.

The RM5.3 million that tells you what this deal actually is

Buried in FPI's use-of-proceeds breakdown is the more human part of this story. Of the RM22.1 million, FPI has earmarked:

• RM16.25 million for general working capital
• RM5.3 million for relocation costs — including retrenchment benefits for staff unwilling or unable to relocate to Port Klang, debris clearing, and the cost of moving machinery, stock, fixtures and fittings
• RM120,000 in transaction expenses
• RM430,775 in real property gains tax

This is not a portfolio reshuffle. FPI's own filing states the Sungai Petani factory "will effectively be discontinued" — the site closes, some staff move to Port Klang, some don't. That RM5.3 million relocation line is the actual cost of a Malaysian manufacturer consolidating out of a secondary industrial town and into the Klang Valley's port-logistics core, in one transaction.

What's still pending

The deal is conditional on written consent from Perbadanan Kemajuan Negeri Kedah (PKNK), the state agency that owns the underlying land and granted FPI's original lease — consent is due within two months of the SPA, so by around late October 2026, with completion targeted for Q1 2027. The transaction represents 6.44% of FPI's asset base under Bursa's percentage-ratio test, below the threshold that would require shareholder approval.