Hock Seng Lee awarded RM298.98m bridge construction contract

PETALING JAYA: Hock Seng Lee Bhd (HSL) has received a letter of acceptance (LOA) from Sarawak state government via the state’s public works department for the proposed construction and completion of Batang Palong Bridge, Mukah with a contract value of RM298.98 million through an open tender exercise.

The project is part of the RM11 billion allocation earmarked for upgrade works for the coastal roads, second trunk roads and water supply works in Sarawak.

The work scope for HSL includes the construction of a 1.9km long reinforced concrete structure balanced cantilever bridge that includes substantial marine piling works using 1500mm diameter steel pipe pile.

The other scope of works includes earthworks, geotechnical, drainage, pavement works and the associated mechanical and electrical works.

Physical construction work is expected to commence in May this year for a period of 48 months.

HSL expects the contract to contribute positively to its earnings and net assets for the duration of the project.

HSL managing director Datuk Paul Yu said the latest contract win has boosted the group’s order book to a record RM3.2 billion, of which RM2.5 billion is unbilled.

“We therefore have sufficient work to keep us busy and will remain selective in our procurement initiatives, bidding when projects align with our core strengths, capacity and capabilities,” he noted.

UEM Edgenta’s Opus is consultant for Sarawak road project

PETALING JAYA: UEM Edgenta Bhd’s asset consultancy arm Opus Consultants has been appointed by the Sarawak government as the project management consultant for the RM11 billion state’s Coastal Road Network and Second Trunk Roads project.

The project is estimated to be completed in eight years.

The first work package for the project, which is valued at RM50 million, was awarded to Opus Consultants recently and will see the company, working together with Sarawak Public Works Department, in providing overall project management and technical expertise.

This includes to oversee key deliverables within the project work scope such as preliminary and detailed designs of 20 work packages ranging from the development of new roads and bridges, including four iconic cable-stayed bridges and pavement rehabilitation works.

Opus Consultants will also be overseeing upgrading works of 300km of the existing 896km of coastal roads; construction of 10 new bridges for the Coastal Road Network Project; and construction of 232km for Second Trunk Roads project.

The Coastal Road Network and Second Trunk Roads project was launched by Sarawak Chief Minister Datuk Patinggi Abang Zohari Tun Openg in Sarikei, Sarawak on April 6.

The Coastal Road Network is set to provide the state’s coastal area with better access and connectivity between towns namely – Kota Samarahan, Sadong Jaya, Sebuyau, Kabong, Tanjong Manis, Daro, Matu, Balingian and Bintulu to the Pan Borneo Highway network.

The Second Trunk Roads project on the other hand will link Kuching and Sibu to the Pan Borneo Highway network through Sebuyau, Seri Aman and the Betong link.

Pharmaniaga a ‘buy ’ despite Cabinet scrutiny

PETALING JAYA: MIDF Research has upgraded Pharmaniaga Bhd to a “buy” call from “neutral” previously, with a revised target price of RM2.45 from RM2.63 pre-viously, despite concerns over the government not renewing its concession agreement with the company.

Pharmaniaga has a 10-year concession agreement with the government which is slated to end in November 2019. The group, along with My EG Services Bhd, Padiberas Nasional Bhd and Puspakom Sdn Bhd are currently under scrutiny by the cabinet com-mittee on market monopolies.

MIDF Research said there is a fair chance that the concession business still be awarded to Pharmaniaga given its years of experience and expertise in the logistics and distribution business; the huge amount of investment to ensure efficient deliveries; and the massive savings enjoyed by the Health Ministry from Pharmaniaga’s handling capability.

“We estimate that it will take up at least four years for other competitors to reach the same capability. In addition, the group has renewed its focus on its non-concession business by streng-thening business synergies between its Indonesian sub-sidiaries to expand its presence in the Indonesian market,” it said in its report today.

MIDF Research said these factors will help support the group’s earnings going forward while the recent decline in the share price presents an oppor-tunity to accumulate the stock.

“In addition, the stock commands an attractive dividend of more than 7% in comparison with its peers. All things considered, we upgrade our call on the stock to ‘buy’,” it added.

Based on a meeting with Pharmaniaga, MIDF Research concluded that the company’s logistics and distribution of medical supplies is vital to all 148 government hospitals and 1,700 clinics nationwide.

Pharmaniaga’s concession business involves the logistics and distribution of 750 items listed under the Health Ministry’s approved product purchase list. The company is required to organise tender exercises that involve all prospective vendors but the selection of vendors is managed by the ministry.

“The company is allowed to submit its own bid to supply the products but their tender documents need to be sub-mitted two weeks in advance before the public call for tender. This ensures a level playing field to all other potential vendors. In fact, Pharmaniaga’s in-house products only accounted for about 27% of the concession business,” MIDF Research noted.

Pharmaniaga has incurred huge investments on system and process improvements over the 10-year tenure of the concession agreement, including RM300 million for the development of the Pharmacy Information System (PhIS) across the ministry’s 1,118 facilities.

In FY19, the company plans to invest some RM122 million to increase its warehouse capacity, particularly in Terengganu and Sarawak to further reduce delivery time. Its current ware-house capacity is about 430,000 sq ft nationwide.

Meanwhile, the group is also working on reducing its depend-ency on the concession business, with a mid-term target revenue contribution of 40% from the concession business and 60% from the non-con-cession business.

“Going forward, we expect the growth momentum to continue given the company’s focus on manufacturing seg-ment which commands a better margin. In fact, Pharmaniaga has allocated about RM52 million to build up its manufacturing capabilities,” said MIDF Research.

The research house, however, revised Pharmaniaga’s earnings forecasts downwards for FY19F and FY20F by RM5.9 million and RM5.8 million respectively, based on higher finance costs to fund the planned capital expenditure and higher effective tax rate of 30%.

MAHB up 2.12% after extension of operating agreements

PETALING JAYA: Malaysia Airports Holdings Bhd’s (MAHB) share price rose 2.12% in the first trading session today after the government extended its operating agreements (OA).

At 12.30pm, MAHB was trading at RM6.75 with 2.53 million shares changing hands.

The Transport Ministry has approved and granted MAHB an extension of the OA for an additional 35 years from the existing 25 years up to Feb 11, 2069, giving the rights to MAHB to continue operating, managing and maintaining the existing 39 airports and short take-off landing airports in Malaysia for 60 years from Feb 12, 2009.

According to its stock exchange filing, the current OA and lease agreements will be superseded and replaced with four new OAs which are the OA for KLIA, OA for Designated Airports in Peninsular Malaysia, OA for Sabah Airports and OA for Sarawak Airports and new lease agreements, respectively.

EGM notice to remove two Seacera directors withdrawn

PETALING JAYA: Seacera Bhd’s substantial shareholder Datuk Tan Wei Lian has withdrawn the notice of EGM dated March 28, which seeks to remove two directors.

Seacera said in a filing with the stock exchange that it had received a letter from Tan, who is also Tiger Synergy Bhd chairman, on April 9 to withdraw the EGM notice dated March 28 and that he will not proceeding with the EGM.

Seacera said it will obtain legal advice from its solicitors on the matter.

Recall that Tan, who has emerged as Seacera’s substantial shareholder with a 13.96% stake, proposed to remove Mohd Fazillah Kamaruddin and [email protected] Halim Ismail and to be replaced by five others including himself, Tan Lee Chin, Rizvi Abdul Halim, Datin Ida Suzaini Abdullah and Clarence Yeow Kong Chew.

In a separate filing, Seacera said it has entered into a memorandum of understanding with Sinar Tile Industries Sdn Bhd for the operation of the latter’s tiles manufacturing factory in Kuching, Sarawak.

The parties intend to discuss, explore and evaluate the possibilities derived from the memorandum.

Seacera said the collaboration with Sinar Tile Industries will provide the group with an advantageous platform to further benefit and better prospects in the future.

Perodua targets 50pc share of Sabah auto market

TAWAU, March 23 — Perodua Sales Sdn Bhd is targeting to capture a 50 per cent share of the automotive market in Sabah this year, said its managing director Datuk Dr Zahari Husin. He said there was good demand for its vehicles in Sabah, with…

Wah Seong secures exclusive distributorship for Doosan products in Malaysia

KUALA LUMPUR: Wah Seong Corp Bhd’s indirect 60%-owned subsidiary WDG Resources Sdn Bhd has been made the exclusive distributor for South Korea’s Doosan Infracore Co Ltd construction equipment throughout Malaysia, paving the way for the company to tap vast business opportunities in East Malaysia.

This follows the signing of an exclusive distributorship agreement today between WDG and Doosan, which is South Korea’s global leader in infrastructure support equipment.

The agreement extends WDG’s exclusive distributorship rights to also cover Sabah and Sarawak from just Peninsular Malaysia previously.

In June 2017, WDG had been appointed the exclusive distributor of Doosan range of equipment including excavators, wheel loaders and articulated dump trucks within Peninsular Malaysia.

Wah Seong managing director and group CEO Chan Cheu Leong said the expanded distributorship provides an opportunity for WDG to participate in infrastructure and construction projects in Sabah and Sarawak, including the Pan Borneo Highway.

“The extension of the Doosan distributorship will double the sales potential for WDG. WDG is confident of riding on its excellent track record to break new grounds in Sabah and Sarawak,” Chan said in a statement.

The distributorship is expected to contribute positively to the earnings of WSC group over the period of the distributorship agreement.

Traditionally, Wah Seong group’s industrial trading and services division is mostly entrenched in Peninsular Malaysia; this latest partnership gives the division an opportunity to reach out to Sabah and Sarawak in terms of trade and new opportunities.

Under the two-year distributorship agreement, WDG can leverage on Doosan’s machinery and equipment to take part in infrastructure projects in Sabah and Sarawak. In the past, its focus has been mainly in Peninsular Malaysia.

Doosan vice president of sales and marketing Chris Jeong Kwan Hee said the partnership with WDG will further establish Doosan brand in Malaysia.

“WDG has been effectively and successfully promoting Doosan products in the Malaysian construction industry since 2017. With the exclusive distributorship given to WDG, we are confident to establish a strong presence in the local infrastructure project business,” he added.

Doosan was established as Cho SunMachine Works in 1937 and was renamed Doosan Infracore in 2005. Apart from its own brand of construction equipment and power generation equipment, it also acquired the Bobcat brand in 2015.

WDG is principally involved in the distribution and service of industrial machinery, equipment and parts. It is also an authorised distributor of Mitsubishi Heavy Industries range of diesel generator sets.

After first securing the sole distributorship of Doosan range of construction equipment in Peninsular Malaysia, WDG has established a firm footing in providing its products and services to the local infrastructure and construction sectors.

The distributorship with Doosan also resulted in the group securing contracts to supply construction equipment to the Bandar University Pagoh Project, the Northern Free Trade Zone in Bukit Kayu Hitam, Kedah, the Gemas Double Track Project, Elmina Township in Subang and MCKIP in Kuantan.

KKB bags 3 contracts worth RM30.8 million

PETALING JAYA: KKB Engineering Bhd has bagged three contracts worth RM30.8 million.

KKB received a letter of award from Petronas Dagangan Bhd (PetDag) for the price agreement for new and refurbishment of liquefied petroleum gas (LPG) cylinders for PetDag: fabrication, reconditioning of LPG cylinders and for the supply & delivery of LPG compact valves.

Its associate company Edisi Optima Sdn Bhd received s letter of award from PetDag for the price agreement for refurbishment of LPG cylinders for PetDag: requalification and shot-blast repainting of LPG cylinder.

KKB also received a purchase order from Laras Jaya Engineering Sdn Bhd (LJE) for the supply of mild steel concrete lined (MSCL) pipes for Sarawak Water Supply Grid Programme – stressed areas.

Both PetDag contracts are effective from March 15, 2019 and shall be valid for a period of three years, unless terminated earlier with an option to extend the contract period for a further period up to two years.

The completion date for LJE is scheduled within nine months.

“The contracts/purchase order(s) are expected to contribute positively towards the earnings and net assets of the company and group for the duration of the supply period,” KKB said in a stock exchange filing.

More Malaysians starting to shop online, says Shopee

KUALA LUMPUR, March 15 — Shopee Malaysia has made it into the top 10 most visited sites in Malaysia, making it the number one e-commerce site in the country, Comscore, the trusted currency for planning, transacting and evaluating media across…

Mida sets ‘realistic’ target for approved investments this year

KUALA LUMPUR: Malaysia aims to maintain approved investments this year at around the RM200 billion level given the challenging economic environment currently, after registering marginal growth to RM201.7 billion last year, says the Malaysian Investment Development Authority (Mida).

“We want to have as much as possible but we need to be realistic on the current economic scenario and challenges. We target the approved investments (in 2019) to be around RM200 billion (level),” Mida CEO Datuk Azman Mahmud said at a press conference in conjunction with the Miti Annual Media Conference 2019 today.

To date, Mida has 399 manufacturing and services projects with investments totalling RM23.7 billion in the pipeline.

Earlier, International Trade and Industry Minister Datuk Darell Leiking disclosed that Malaysia attracted a total of RM201.7 billion worth of investments in the manufacturing, services and primary sectors in 2018, up 0.55% from RM200.6 billion approved in 2017.

In the first half of 2018, investments approved were valued at RM86.1 billion, while a total of RM115.6 billion investments were approved in the second half of the year.

The manufacturing sector registered an increase of 37.2% in approved investments totalling RM87.4 billion in 2018, compared with RM63.7 billion in the previous year.

Leiking said petroleum products, including petrochemicals, with approved investments of RM32.9 billion contributed the lion’s share to the overall performance in the manufacturing sector.

“A notable project in this industry is Sarawak Petchem which is part of the Sarawak state government initiative to develop Bintulu as a petrochemical hub,” he added.

This is in addition to investments by Pengerang Energy Complex and Petronas Chemicals Isononanol that will be located in Johor.

Other industries with high levels of approved investments include basic metal products, electrical and electronic products, chemicals and chemical products, as well as machinery and equipment.

Foreign direct investments in 2018 increased 47.8% to RM80.5 billion from RM54.4 billion in 2017, and accounted for almost 40% of the approved investments.

Meanwhile, domestic direct investments assumed 60.1% of the share at RM121.2 billion.

This year, Leiking said, the Malaysian economy is likely to remain on a steady path as the country’s macroeconomic fundamentals remain strong despite domestic and external challenges.

“Miti and Mida trust that with the existing policies in place, Malaysia will continue to spark confidence in investors and business owners, and attract more quality investments this year.

“We look forward to the realisation of these projects and many more towards a dynamic economy for Malaysia,” he added.