Boustead Heavy in talks for regional expansion

PETALING JAYA: Boustead Heavy Industries Corp Bhd (BHIC), which expects consistent earnings moving forward, is in talks with more than one party currently to venture into the regional business.

Citing the construction of littoral combat ships (LCS) that it undertook, BHIC managing director Tan Sri Ahmad Ramli Mohd Nor said it is competitive with other construction projects in the world.

“People are now more conscious about costs, that’s why they’re talking to us,” he told a press conference after its AGM here yesterday.

Declining to disclose the type of business that it will be involved regionally, he said the group has garnered interest from its participation in key defence and security events such as the Langkawi International Maritime.

With its track record in delivering and servicing naval vessels, BHIC looks forward to tapping new prospects to expand its business internationally, to meet the requirements of regional navies.

Chairman Tan Sri Lodin Wok Kamaruddin said its proposed working arrangement and exposure to the Chinese will give it some support in terms of efficiency in costs to undertake ship building projects. BHIC’s RM1.2 billion contract for the supply of four littoral mission ships (LMS) involves collaboration with a Chinese partner.

BHIC is involved in maritime, defence and heavy engineering activities, with shipyards in Lumut, Penang and Langkawi.

Locally, the Malaysian government is its key client in the defence and security sector.

BHIC’s order book stood at RM7.5 billion, which can last the group for the next five years. Ahmad Ramli said it continues to build its order book. This will include it making a proposal for the replacement of the Royal Malaysian Navy’s (RMN) fleet.

Lodin said BHIC is realigning its operations to ship building rather than maintenance, repair and overhaul, taking consideration of the RMN’s requirements.

“We’re confident that we’re in a better position to market our products to the region and any country in this part of the world,” said Lodin.

The group expects its LCS, LMS and submarine projects to drive its performance this year.

“We’re cautiously confident that we’ll move consistently upward. We’ve learnt our lesson. We should be able to maintain and grow our revenue and margins,” said Ahmad Ramli.

The group returned to profitability in FY16 compared with a net loss in FY15.