KJTS Group Bhd has entered into a 10-year savings-sharing agreement with Top Glove Corp Bhd, which is expected to generate approximately RM27.3 million in revenue based on guaranteed annual energy savings of RM5.47 million.
In a Bursa Malaysia filing on Monday, KJTS said its 70.67%-owned subsidiary, iHandal Green Assets Holdings Sdn Bhd (IHGASB), signed the agreement with Flexitech Sdn Bhd, a wholly owned unit of Top Glove, to undertake the construction, installation and maintenance of its Heatfuse Heat Recovery Solutions system at Top Glove’s manufacturing facilities in Banting.
Under the arrangement, IHGASB will fully finance the project and receive 50% of the actual energy cost savings generated by the system throughout the contract period.
Based on the guaranteed annual savings of RM5.47 million, KJTS’ share is estimated at around RM2.73 million per year, translating into about RM27.3 million over the decade-long agreement.
The Heatfuse Heat Recovery Solutions system captures waste heat produced during manufacturing and repurposes it into hot water for process heating, helping manufacturers lower energy usage, operating expenses and carbon emissions.
KJTS also revealed that IHGASB had signed similar savings-sharing agreements within the past year with two other Top Glove subsidiaries, TG Medical Sdn Bhd and GMP Medicare Sdn Bhd, for facilities in Klang. These projects are expected to deliver guaranteed annual savings of RM877,633 and RM1.77 million respectively, under the same 50:50 savings-sharing model.
The group said the agreements are anticipated to strengthen its earnings and net asset position in the years ahead.
KJTS shares ended Monday’s trading session 1.9% lower, down 1.5 sen to 78.5 sen, giving the company a market capitalisation of RM542.15 million. The stock has declined 25.9% over the past 12 months.
