SHAH ALAM: Foundation and piling specialist Pintaras Jaya Bhd is confident of securing an order book of RM250 million for the financial year ending June 30, 2018 (FY18) and retaining a healthy margin in its tender prices despite having to lower rates in the face of competition.
Chairman and managing director Dr Chiu Hong Keong said it has secured an order book of RM80 million so far, with only RM170 million left in the remaining nine months to meet its order book target. It has tendered for RM1.3 billion worth of jobs, mainly residential and infrastructure projects in the Klang Valley as it wants to rebuild its order book for FY18.
“We think the piling market will improve with the launch of infrastructure projects, especially when the LRT3 site works commence and this is expected to take up a lot of the available piling market capacity. There are also more residential projects (now) compared to 12 months ago. We think that going forward there is enough jobs and we’re confident of securing more,” he told SunBiz recently.
Huge projects like the East Coast Rail Line, Kuala Lumpur-Singapore High Speed Rail and Mass Rapid Transit 3 (MRT3) when implemented will sustain the job flows. The company believes the property market will recover, especially with developments centred around the MRT and light rail transit stations and railway terminals. These developments are generally high density with smaller built-ups and affordable pricing. In addition, the government’s emphasis on PR1MA housing schemes to build affordable homes will boost demand for piling services.
Chiu said the sizeable contracts of infrastructure projects have attracted foreign players from Singapore, Europe, Korea and China. Their presence is increasingly felt and this has resulted in a more competitive environment.
“We have to be more competitive. Pricing is one (aspect), and the other is to depend on our reputation for quality work, timely completion and availability of equipment. These are the factors that will (enable us to) compete against (the other players),” Chiu said, adding that new players could be slower to assemble their fleet and resources as they may not have the equipment in place.
Despite having to bring down rates due to competition, Chiu said Pintaras Jaya is comfortable with its pricing and is still able to achieve a higher margin than its competitors through cost management.
Pintaras Jaya is aiming for a better financial performance in FY18 compared with FY17 on the back of more construction job wins. The construction business contributes about 84% to its revenue. In FY17, it saw a disappointing fourth quarter slowdown in the construction segment, caused by a lack of job wins that blemished the year’s performance.
“There were fewer tenders and more competition, so prices didn’t meet our margin targets. But the future looks much better,” said Chiu.
After an expected slow Q118 as its new jobs are just commencing, he said, the company should do better in the subsequent quarters. Infrastructure projects will drive the growth of the construction industry.
Pintaras Jaya wants to increase its piling rigs, of it has 30 sets currently. It allocates about RM20 million in capital expenditure annually, which can be used to buy three sets of piling rigs.
Source: The Sun Daily