Goodyear Malaysia Bhd is inviting tenders for its 29.3-acre industrial parcel following its decision in March to shut down its manufacturing facility in Malaysia. (Photo by Low Yen Yeing/The Edge)

KUALA LUMPUR (July 30): American tyre company Goodyear has put its factory in Shah Alam’s Section 15 up for sale, following its March decision to shut down its manufacturing facility in Malaysia as part of its cost restructuring efforts.

An advertisement appeared in The Edge for the week of July 29-Aug 4, 2024, inviting tenders for a 29.3-acre industrial parcel described as prime industrial property with the address at Lot 51, Persiaran Selangor, Section 15, Shah Alam, Selangor.

The advert, placed by real estate consultancy firm CBRE WTW, also indicated that the land has "potential for redevelopment". The closing date for the tender is Aug 28, 2024.

Based on The Edge’s channel checks, the surrounding lands appear to be valued between RM160 and RM190 per square foot based on recent transactions in the last two years.

For illustration purposes, based on a back-of-the-envelope calculation, the 29.3-acre site may be valued at around RM243 million based on the RM190 per square foot.

Goodyear Malaysia's sprawling 29.3-acre industrial land in Section 15 of Shah Alam is described as prime industrial property which is hard to get in the market which a markert observer said is likely to fetch a higher premium. (Photo by Low Yen Yeing/The Edge)

However, it is likely for the site, which houses Goodyear Malaysia Bhd’s 52-year-old factory, to fetch a higher premium, a market observer said.

“The market price is historical and there should be a premium for this land sale due to its sizeable land which is hard to get in this market,” the market observer told The Edge.

Located in a mature industrial zone in Shah Alam, the site has great accessibility via major highways such as the Federal Highway.

“Typically, the land sale in the market ranges between one to three acres nowadays. With a land size of 29.3 acres, it would garner keen interest from buyers, given the potential for redevelopment plans such as an industrial park,” he explained.

Neighbours around the site include brewer Carlsberg Brewery (Malaysia) Bhd, integrated agro-based business group QL Resources Bhd and frozen food manufacturer Kawan Food Bhd. Tiong Nam Industrial Park, measuring 25 acres, is also located near to the site.

However, it is understood that the tender has not seen much participation from surrounding warehouse and logistic players. Rather, it is seeing some interest from commercial and industrial property players, as well as logistic players with no footprint at the location.

When announcing its decision to shutter the plant — which opened in 1972 — in March, Goodyear said the move was part of its Goodyear Forward corporate restructuring programme, aimed at delivering US$1 billion (RM4.64 billion) in cost reductions by 2025.

Its closure, effective June 30, impacted about 550 workers, according to reports citing an internal memo written by Nathaniel Madarang, president of Goodyear Asia Pacific.

According to reports, Goodyear's Madarang said the entire closure process is anticipated to be completed by the end of the year.

Nonetheless, Goodyear said it will continue to sell their products in Malaysia.

Goodyear's presence in Malaysia dates back to 1908 when The Goodyear Orient Company, a rubber buying firm, was established in Singapore to purchase rubber from plantations in then Malaya and Indonesia. According to its website, Goodyear began selling its products here in 1929.