Sunway to splash RM100m on expansion

By Sharen Kaur

sharen@mediaprima.com.my

Published in NST on May 25, 2013

FIRST OF ITS KIND: Company plans new 3.6ha theme park featuring nine water-based rides

SUNWAY Bhd is investing between RM50 million and RM100 million to expand Sunway Lagoon, Malaysia’s premier water theme park in Bandar Sunway, Selangor.

It is understood that Sunway is mulling over plans to build the water theme park, said to be the first of its kind in Malaysia, adjacent to Sunway Lagoon.

Built in 1992, Sunway Lagoon is owned and operated by Sunway’s subsidiary, Sunway Lagoon Sdn Bhd (SLSB).

Bill Holman, SLSB consultant director and one of Sunway Lagoon’s founders, confirmed the expansion plans.

He said Sunway is planning to build a new 3.6ha theme park that will feature nine differ-ent water-based rides.

“The development will be unique. We will also provide water transportation throughout the park and a separate entrance to make it convenient for visitors,” Holman said recently.

Sunway Lagoon forms part of Sunway’s award-winning multi-billion ringgit Sunway Integrated Resort City (SIRC), formerly a tin mining area.

Sunway’s founder, Tan Sri Jeffrey Cheah, acquired 350ha in the area from a British company to develop SIRC, which has six key components,namely mall,hotel,office,theme park, education institute and hospital.

Some 35.6ha have been allocated to build the theme park, which is about 85 per cent developed.

It is estimated that Sunway has invested more than RM500 million to develop Sunway Lagoon.

The theme park has become the biggest and most successful multi-attraction destination in Malaysia with its five signature parks — water, amusement, extreme, scream and wildlife.

It also has the world’s largest man-made sandy surf beach and longest pedestrian suspension bridge. The latest additions are the world’s first 5D Waterplexx and the RM13m Vuvuzela, the world’s largest water ride.

Holman said there are also plans to upgrade Sunway Lagoon’s presentation by adding shows and parades.

“The reason we are doing this is to meet emerging competition. We want people who have been to Sunway Lagoon to keep coming back for the new attractions,” he said.

For this year, SLSB has increased its budget by 20 per cent from 2012 to upgrade existing facilities and introduce new rides.

Sunway Lagoon has attracted close to 30 million visitors during the last 20 years. Last year alone, it welcomed 1.5 million visitors, of which 60 per cent were tourists.

“Revenue has been growing by 10 per cent to 15 per cent per year. We want to continue the double-digit growth year-on-year and this can be achieved by offering the best to our customers,” Holman said.

Scomi order book exceeds RM5b

By Sharen Kaur
sharen@mediaprima.com.my
Published in NST on May 14, 2013

Scomi Group Bhd's current order book has surpassed RM5 billion with the latest contract worth RM98.5 million in Turkmenistan.

Just two months ago, its member company Scomi KMC Sdn Bhd won a RM2.1 billion job from Petronas Carigali to supply drilling fluids, barite materials, equipment and services for five years.

Scomi Group - which recently underwent a restructuring that saw the disposal of its stakes in Scomi Oilfields Ltd, Scomi Sosma Sdn Bhd and Scomi KMC to its 65.65 per cent owned listed arm, Scomi Marine Bhd - has been actively bidding for new jobs worth over US$1 billion (RM3 billion) in Malaysia and internationally.

For the contract in Turkmenistan, Scomi Group's oilfield services business won a two-year contract from Dragon Oil (Turkmenistan) Ltd to provide drilling and completion fluids services.

The contract started from January this year, Scomi said in a statement yesterday.

This is not the first job that Scomi has won contracts from Dragon Oil. The group has been providing drilling fluids and solids control services to Dragon Oil since 2007.

This win is certainly testimony to the quality of our products and services. Our drilling and completion fluid solutions have been formulated to meet the needs of our clients.

Our ability to provide consistent performance and the technology behind our products was instrumental in winning this contract for us, said Wan Ruzlan, Scomi Group president of market units for oilfield services division.

Turkmenistan is one of Scomi's key focus countries.

It has been providing drilling fluids, drilling waste management services, solids control equipment and thermal desorption services to Turkmenistan since 2004.

Scomi believes there would be an increase in oil and gas activities in Turkmenistan, which is speeding up works to support its own demand and global supply.

Wan Ruzlan said the oilfield services division has performed well over the last six months, wining several contracts in Qatar, Myanmar, Malaysia and Indonesia.

The restructuring exercise has created a diversified and enlarged entity which offers comprehensive integrated upstream drilling services to the oil and gas industry.

This merger also accords Scomi Group a stronger financial standing for greater flexibility in raising capital to fund its continued business growth, Wan Ruzlan said.

Scomi Group posted a net profit of RM18 million on revenue of RM1.59 billion for fiscal year 2012.

The stock fell five sen, or 1.28 per cent, yesterday to close at 38.5 sen.

4 groups eye KL-pore high-speed link project

By Sharen Kaur
sharen@mediaprima.com.my
Published in NST on May 2, 2013

FOUR consortiums will bid for the multi-billion ringgit high-speed rail (HSR) link between Kuala Lumpur and Singapore, sources said.

Business Times was told that Tan Sri Syed Mokhtar Al Bukhary's MMC Corp Bhd is forming a consortium with Gamuda Bhd and roping in Chinese and European system integrators to bid for the HSR project.

Malaysia and Singapore in February had in principal agreed to build the HSR link between the two countries, with a target completion date of 2020.

The Land Public Transport Commission (SPAD) has said that details of the HSR link is being ironed out and tenders will be called by year-end.
SPAD chief development officer Azmi Abdul Aziz said the project will start this year.

Business Times has reported that the government is budgeting around RM40 billion for the project, which includes RM10 billion to buy high-speed bullet trains.

The HSR project has attracted three proposals over the last five years. They are from UEM Group Bhd-Ara Group; YTL Corp Bhd; and China Infraglobe-Global Rail Sdn Bhd.

It is understood that government investment arm Khazanah Nasional Bhd is also eyeing the HSR link and its involvement in the project will be via UEM Group, in which it holds a substantial stake.

UEM Group, meanwhile, is working with Ara Group, founded by Tan Sri Ravindran Menon, to form a consortium with European companies that may include Spanish bullet train maker Talgo.

Business Times reported recently that Talgo, part of a consortium that won a US$9 billion (RM27.4 billion) HSR job in Saudi Arabia last year, is planning to offer its "duck" train here.

Talgo believes its "El Pato" (Spanish for duck) trains are suitable for Malaysia's HSR project.

Its deputy chairman Mario Oriol said it is talking to several Malaysian companies, including the current interested bidders, to form a consortium and bid for the HSR project here.

The source said YTL Corp, controlled by Tan Sri Francis Yeoh, is also interested in the project and will make a bid with several foreign firms, which may include Siemens AG.

The group first mooted the idea to build the HSR link in 2008 but the proposal was shot down by the government due to the high cost, which was RM8 billion then.

Global Rail, a privately-held railway engineering firm, meanwhile, is in talks with Canada's Bombardier Inc and Chinese firm China Railway Group, the source said.

"We expect another group to come in but so far, these are the four interested parties. They are strengthening their position by bundling in experts and expertise," the source added.

Benalec set to seal two major deals

By Sharen Kaur

sharen@mediaprima.com.my

Published in NST on May 13, 2013

LAND RECLAMATION: Investments in Tanjung Piai project expected to exceed RM35b

Marine construction company Benalec Holdings Bhd is close to inking two major deals for its land reclamation project off Tanjung Piai in Johor, which will translate into investments exceeding RM35 billion.

Benalec, which is 52.3 per cent owned by the Leaw family, has the rights to reclaim 1,410.3ha off Tanjung Piai.

The company sealed the deal with the Johor government last September as the state wants to develop the area as an oil and gas hub.

Benalec inked its first deal to reclaim 404.7ha and sell the land to the Abu Dhabi government in March.

Abu Dhabi, which holds six per cent of known crude oil reserve in the world and pumps an estimated 2.65 million barrels per day, will invest RM21 billion to build a crude oil and petroleum storage facility that is able to hold 60 million barrels of oil.

Abu Dhabi intends to store oil in Johor to tap the Asian market, where growth is fuelling demand for energy. It also wants to ensure supply in times of crisis in the Middle East by using Johor as the hub.

Brian Mak, Benalec’s business development manager, said the company is in talks with potential investors from Europe and the Middle East.

Benalec is also talking to independent storage operators in the Jurong petrochemical hub in Singapore, Mak added.

Jurong is the world’s largest bunkering port and third largest oil hub, and is home to major storage operators like Vopak.

“There will be more Mideast and European names taking up space at our project. We have spoken to almost all independent storage operators in Jurong. Vopak and Vittol Tank Terminal International (VTTI) have indicated their interest.

“After inking the deal with Abu Dhabi, I am sure that it will be the catalyst for the people whom we are talking to right now to speed up and do something. We are confident we can monetise at least half of the landbank soon,”Mak said.

It was reported that Benalec was pricing its initial reclaimable tracts off Tanjung Piai at more than RM3 million per acre, compared with RM10 million at the Jurong hub, which was also built on reclaimed land.

Vopak and VITI are already operating in Johor while Vopak, in partnership with Dialog Group Bhd, is constructing storage tanks at the Refinery and Petrochemical Integrated Development in Pengerang, Johor.

Gadang looks overseas to power up earnings

By Sharen Kaur
sharen@mediaprima.com.my
Published in NST on May 6, 2013

Tan Sri Kok Onn, the founder of Gadang Holdings Bhd, is banking on jobs from the utilities industry abroad to help diversify the company's earnings base.

Kok Onn, who is also the managing director of the company, believes that venturing into the power business will help provide long-term recurring income.

He told Business Times this just days after Gadang informed Bursa Malaysia that it is in the midst of making its maiden effort to break into the power business overseas.

Last week, Gadang said its indirect wholly-owned unit Asian Utilities Pte Ltd (AUP) plans to buy a 60 per cent stake in PT Ikhwan Mega Power (PTIMP) for RM3 million.

PTIMP has a power purchase agreement with Indonesian national power company, PT Perusahaan Listrik Negara, to develop and supply power for 15 years.
The acquisition of the Indonesian hydroelectric power firm will be Gadang's first venture into the power sector.

"We expect PTIMP to contribute positively to future earnings," Kok Onn said, without elaborating.

AUP was tasked to undertake the Indonesian power asset purchase because it is well-versed with the business environment in Southeast Asia's biggest economy.

Over the past six years, AUP has bought controlling interest in five Indonesian water supply companies.

The total treated water supplied by AUP is about 900 litres/second and the company says it targets to increase it to between 1,500 and 2,000 litres/second within the next two to three years.

The increase will be achieved by expanding current production facilities and via concession expansion.

Contribution from the utilities division to the group level coffers is still smallish, with the company's main power still skewed towards the construction and property businesses.

The utilities division contributes about a tenth to group-level pre-tax profit and it is Kok Onn's aim to improve the contribution to 25 per cent in the long term.

For the year ended May 31 2012, Gadang registered a net profit of RM14.5 million on the back of RM246.3 million revenue.

The earnings got analysts attention as Gadang is a company on the go, just biding its time to join the big league, where players such as Gamuda Bhd and IJM Corp Bhd dominate the stage.

In the past seven months, Gadang has received coverage from research houses such as JP Apex, ECM Libra, Alliance Research and CIMB Research.

The company did not disappoint street consensus, chalking better results each time around.

For the second quarter ended November 30 2012, Gadang's net profit surged to RM12.2 million versus RM1.1 million posted a year ago, while revenue for the first six months of the current financial year stood at RM171.2 million.

For the period under review, the company said its construction division also recorded higher revenue of RM123.59 million compared with RM80.89 million before, while revenue from the property division stood at RM53.72 million.

With this in mind, Alliance Research said Gadang is at an inflection point with 29 per cent of compound annual growth rate over the next three years.

Gadang currently has an existing order book of RM1.48 billion, which is 7.8 times the company's 2012 construction revenue.

Its tender book is RM4 billion thick, with the Kinrara Damansara Expressways job valued at between RM1.5 billion and RM1.8 billion and subcontract works for the West Coast Expressways valued at RM1.3 billion, accounting for the bulk of the tender book.

Alliance Research in a report last month said Gadang is also the favourite to win a RM1 billion earthworks contract from 1Malaysia Development Bhd's Tun Razak Exchange.