Keeping a focus on applications for high-quality plastic injection moulding solutions offering the potential for long-term growth and a sustainable operating return on sales of at least 15%, Balda (Bad Oeynhausen / Germany ; www.balda.de) has sold off its Ipoh, Malaysia site.

The company’s management board, with approval from its supervisory board, sold the site under a management buyout to Blue Ocean Genius, financially effective 31 March. In a statement recently released by the company, under the terms of the deal, Blue Ocean acquires all shares of the subsidiary Balda Solutions Malaysia (BSM). Excluded from the sale are the land and factory building, which will remain under the possession of the Balda Group as key assets and will be rented back to BSM.

The international producer of plastics products for industrial applications stated that it had come to the decision to sell the Asian location following a thorough analysis of the site's strategic prospects. The company explained that in the first three quarters of the 2012/2013 financial year (1 July 2012 to 31 March 2013), the site had made an operating loss and thus was not meeting the performance criteria the company had set for long-term growth.

The new owner, Blue Ocean, is majority-owned by James Lim, BSM’s managing director. The Ipoh facility, which produces plastics products for the consumer electronics industry and is part of the Balda Technical segment, underwent a restructuring in 2012 under his leadership. The transaction’s closing, subject to regulatory approval, will result in non-cash effects on earnings amounting to approximately EUR -7 m. Balda still expects a clearly positive consolidated profit for the 2012/2013 financial year. In addition, the company has calculated that the transaction will result in a cash inflow of around EUR 6m over the next three years, primarily through rental income.

Dominik Müser, Balda CEO, commented on the deal: “The urgently needed strategic development of activities in Malaysia would have required substantial investments in the coming years in a weak environment for consumer electronics. With the sale, all of our group's activities are now profitable. Yet, by holding onto the land and the building, we maintain valuable assets in the region.”