KUALA LUMPUR (Oct 23): MGB Bhd, a construction and property development arm of LBS Bina Group Bhd, has signed a tripartite memorandum of understanding (MOU) with Saudi Arabia-based parties to explore cooperation and investment opportunities in Almadina Almonawara (Madinah).

In a Bursa Malaysia filing on Monday, MGB said it signed the MOU with Almqr Development Co and Saudi Arabia developer Alameriah Real Estate Development Company.

The MOU was signed in conjunction with Prime Minister Datuk Seri Anwar Ibrahim’s three-day working trip to Saudi Arabia on Saturday.

Almqr was established by royal decree to serve as the investment arm of Madinah, with a focus on urban developments. Meanwhile, Alameriah is primarily involved in general construction activities, real estate development, infrastructure, construction of non-residential buildings, utility projects and the manufacturing of precast concrete products.

Under the collaboration, Almqr intends to engage with Alameriah and MGB as specialists in development, design and build, manufacturing of precast concrete and project management, with the financial and technical capabilities to carry out pioneering projects in the field.

“The MOU represents an opportunity for MGB to explore potential business opportunities in Saudi Arabia and perform collaboration and cooperation with both Almqr and Alameriah,” it said.

The MOU, which is valid for the period of 12 months from the effective date of Oct 21, is expected to have a positive contribution to the group's future earnings per share and net assets per share.

In a separate statement, MGB executive vice-chairman Tan Sri Lim Hock San said that MGB will leverage its extensive experience in providing end-to-end construction services, including design and build, project management, value engineering, construction, infrastructure development and property development, to uncover potential opportunities under the MOU together with the other parties.

“Our precast concrete factories in Malaysia currently have the capacity to produce up to 100,000 cubic metres annually, and the experience we have accumulated and refined over the past several years will be crucial for our success in this collaboration. Additionally, MGB currently operates a precast concrete manufacturing factory located in Jeddah, that has a capacity of 300,000 cubic metres a year,” said Lim.

He noted that the collaboration also marks a significant milestone as the group venture into the Middle East market.

"MGB aims to secure upcoming contracts and expand its order book as we seek to diversify our presence in various markets. In Malaysia, the number of homes completed using precast concrete technology has already surpassed 8,000, and we expect to exceed the 10,000-home threshold by the end of this year," he added.

At noon break, MGB shares, which has risen 43.75% year-to-date, were two sen or 2.99% higher at 69 sen on Monday, giving it a market capitalisation of RM408.24 million.