Tasco plans RM400 mil capex for capacity expansion

TASCO Bhd is all set to take its business to the next level. The total logistics solution provider will spend RM400 million over the next five years to support its long-term logistics capacity needs.

Executive chairman and substantial shareholder Lee Check Poh says the capital expenditure will be used for expansion of its warehouses.

“We currently lease about 350,000 sq ft of warehouse space. We have been paying monthly gross rents of RM1.50 to RM1.70 per sq ft for the space. However, by owning our own warehouse space, our cost will be just 70 sen (per sq ft per month), which works out to about RM350,000 in savings,” Check Poh, who had a 9.83% stake in the company as at July 30, tells The Edge in an interview.

Tasco also expects to pay less income tax as a result of a tax incentive granted by the Malaysian Investment Development Authority recently. Under the integrated logistics services incentive, Tasco enjoys income tax exemption via investment tax allowance (ITA) of 60% on qualifying capex incurred within five years. The ITA can be offset against 70% of statutory income for each year of assessment.

Deputy group CEO Tan Kim Yong says based on the company’s RM400 million capex plan, the savings from lower tax payments are estimated to be about RM60 million for six to seven financial years.