Boilermech to set up RM60m plant in Klang

PETALING JAYA: Boilermech Holdings Bhd plans to spend RM60 million to set up a new plant in Klang in a bid to increase its production capacity by 20%, said its executive director Chia Lik Khai.

He said the company's present manufacturing plant located at Taman Perindustrian Subang, Subang Jaya is running at full capacity.

Of the RM60 million, he said some RM30 million will be used for land purchase and infrastructure works purpose while the remaining RM30 million will be utilised for building and purchasing of equipment and machinery.

"The new plant will be constructed in phases, where the first phase is expected to start operation in mid-2016. We are still finalising the details of plans and layout as we have just got the approval from our shareholders (for the proposed acquisition of industrial land)," Chia told reporters after the company's AGM and EGM here yesterday.

In a filing with Bursa Malaysia on June 9, Boilermech announced plans to acquire 22 acres of industrial land in Klang for RM27.31 million in cash. It said the current average boiler production output of the group is seven bio-energy systems per month. With the new proposed manufacturing plant, it expects the production capacity to increase to 12 bio-energy systems per month.

Biolermech is a biomass boiler manufacturer that is serving mainly the palm oil milling industry. The company has an order book in excess of RM300 million.

Chia said the manufacturing plant will also be used for developing new products, but declined to disclose further information as it is currently still work in progress.

On its plan to transfer from ACE Market to the Main Market of Bursa Malaysia by end of this year, he said the company has already obtained approval from the Securities Commission and is currently looking to appoint of two new independent directors to its board.

"The company is still in the process of evaluating and appointing the directors to the board. When the decision is made, the board of directors will be making the announcement," he added.

Chia also said that the company is still looking at ways in which it can offer its services to independent power producers (IPPs).

"Traditionally our (biomass boilers) are sold to a lot to palm oil mills and only small percentage are used in utility power generation. This is a segment that we believe will have growth because of the government initiative to develop renewable energy."

"We are increasing our marketing and product development efforts to cater for this. On investment into project, we are also open to that. We will look at suitable investment not just building but also to own. We have been looking at some investment proposals but nothing concrete at the moment," he said.

Chia said its primary objective is to sell and become the main supplier of energy solutions.