By PAULINE NG
IN KUALA LUMPUR



STEEL stockist HG Metal plans to fork out nearly RM24 million (S$10.8 million) for five industrial lots in South Johor. The Singapore Exchange-listed company will sign a sales and purchase agreement with Malaysia's UEM Land for the lots at the Nusajaya Industrial Park, in south-west Johor.



HG Metal's decision to buy five out of the eight lots in Phase 2 of the park is a boost to the Malaysian government's Iskandar Development Region initiative in which South Johor is seen as being transformed into a regional logistics hub.

Launched in November, the plan calls for massive investments of over RM300 billion spread over some 25 years, but there has been little by way of progress - at least in public.

But the attraction of HG Metal to the scheme indicates that the Khazanah Nasional-driven initiative is beginning to gather some investment interest.

South Johor is being marketed as a natural choice for land-scarce Singapore businesses. South Johor as a whole complements Singapore's growth strategy with an environment that provides an alternative quality of life that is not readily available in the island state, the national investment agency's website tells potential investors.

While the serious floods which have hit Johor have caused widespread damage, BT understands that investors such as HG Metal have not been put off by the negative publicity. A couple of further announcements can be expected after Chinese New Year, a government official told BT.