TH Heavy eyes jobs in Myanmar, Thailand and India

PETALING JAYA: TH Heavy Engineering Bhd (THHE), which is facing a challenging backdrop due to the slump in crude oil prices, is looking for opportunities in Myanmar, Thailand and India for offshore fabrication jobs, and exploring non-oil and gas fabrication.

Its CEO Nusral Danir said the group has been talking to several parties in terms of opportunities in the three countries.

“We’re hopeful we’d be able to win something soon, hopefully within this year. The party that we’re talking to is in a strong position of winning the job and therefore we could work with them in becoming a sub-contractor,” he told reporters after the group’s AGM here yesterday.

Nusral said the outlook for the financial year ending Dec 31, 2016 (FY16) is expected to remain challenging, especially for the group in the offshore fabrication business. THHE was hit by capital expenditure cuts of oil and gas operators and saw some targeted fabrication projects being deferred.

“With the low oil price remaining for quite some time, the oil majors are unable to award contracts and are deferring the projects,” he explained.

Nusral said the group’s tenderbook consisting of offshore fabrication jobs in Malaysia, which was previously at RM3.4 billion in FY2015, fell to RM1.7 billion after the deferment of projects.

“What we’re really hopeful is that some of these projects will be awarded. The unfortunate part is many of the projects were bid for last year and it has not been awarded, until now,” said Nusral, adding that winning projects is going to be tough.

He added that THHE has submitted several bids for the Refinery and Petrochemical Integrated Development (Rapid) project in Pengerang.

“We’ve also been approached by interested parties to use our yard in Pulau Indah to fabricate ships (marine vessels). We’re hopeful that it will materialise soon.”

The group, which has been in the red since FY14, is also reducing its workforce, which stood at 294 as of May. Its workforce is mainly contract staff working in the yard.
“We’re rightsizing because as the projects move and projects are completed, the people ‘go’ with the project.”

Its orderbook is now RM125 million, which is the remaining work of the Kinabalu offshore project.

“Our orderbook is small compared with what we had before, so it (rightsizing) has to be in proportion to our order book. It’s important we keep our operating costs as low as possible and manpower cost, is a big chunk of that,” said Nusral.