TH Heavy signs JV with Destini to execute MMEA contract

PETALING JAYA: TH Heavy Engineering Berhad (THHE) signed a joint venture agreement with Destini Berhad yesterday, to execute a shipbuilding project to construct and supply three units of Offshore Patrol Vessels (OPV) awarded by the Malaysian Maritime Enforcement Agency (MMEA).

THHE told Bursa Malaysia in a filing yesterday that it will seek written approval of the Ministry of Finance and/or any other relevant agencies for the award of the contract detailed in a Letter of Intent received by THHE on July 27, to a consortium formed between THHE Fabricators Sdn Bhd and Destini Shipbuilding and Engineering Sdn Bhd.

The value of the contract was not disclosed.

The construction of the three units of OPV is estimated to take three and a half years to be completed. The Offshore Patrol Vessels are 80-metres long and will be the largest vessels amongst the MMEA fleet.

THHE CEO Suhaimi Badrul Jamil said, "We see this as a strategic step in making THHE a Group with a balanced portfolio of oil and gas and non-oil and gas businesses. There are strong synergies for both THHE and Destini to be working together on this Offshore Patrol Vessels Project as it combines THHE's capabilities and facilities in handling large scale offshore structure and Destini's shipbuilding expertise."

Destini Group Managing Director, Datuk Rozabil Abdul Rahman said, "We are pleased to have been selected as THHE's partner in this project. Our participation in this project would be a significant feather in our cap as this would be the largest vessels ever built by Destini, positioning us in the league with the other large shipbuilders in the country."

Destini is currently building another type of patrol vessel for MMEA, in particular six units of the 44-metres long New Generation Patrol Craft vessels worth RM381 million.Leveraging on this, the consortium would be able to enjoy cost savings from bulk procurement of common materials and equipment used on both the New Generation Patrol Craft vessels and OPV.

The consortium aims to secure the contract award before the end of the year and this will contribute positively to the financial performance of THHE and Destini over the next few years.