KUALA LUMPUR: WAH SEONG CORPORATION BHD [] (WSC), with a book order of RM1.2 billion most of which are from the pipeline and engineering services division, unveiled its strategy to expand into water-related businesses and renewable energy.
WSC managing director and group chief executive officer Chan Cheu Leong said on Friday, June 17 the group was looking at organic and acquisition-driven growth for all its divisions.
He said this would see WSC boosting its biomass equipment and power generation business, as well as integrating into the fast growing agro-based sector and water industry.
In a statement released after its annual general meeting in Penang, he said another key growth area would'' be in deepwater pipe and gas pipe coating, where Wasco Energy Ltd had the TECHNOLOGY [] and capability to coat pipes for deepwater oil and gas production.
'After toughing it out against a volatile business environment last financial year, WSC again surged into solid profitability in the first quarter this year and is planning major programmes for its divisions,' Chan said.
In the first quarter ended March 31, 2011, its net profit surged 155% to RM43.4 million from RM17.0 million a year ago while revenue increased 19.8% or RM81.3 million to RM490.9 million.
As for FY2010, WSC's net profit attributable to shareholders fell 53.9% to RM55.98 million from RM121.3 million in FY2009 due to the impact from the economic and financial turbulence of 2008/2009.
'Last year, our core activities centred on the commencement of our RM551 million, 850km Gorgon pipe coating project in Australia, of which about 48% is now completed. We expect to fully complete this by first quarter of 2012.
'This project takes up a fair amount of our Kuantan facility's capacity and plans are underway to maximise capacity as new market potential is currently being explored,' Chan added.
As for WSC's book order, he said of the RM1.2 billion, about 74% was from its pipeline and engineering services divisions.
On WSC's pipe manufacturing, Chan said the company was evaluating opportunities to broaden into water related industries and was eyeing waste water treatment and water concessions.
Increased urbanisation and environmental degradation has provided opportunities in water and structural pipes operations, he said.
Chan also provided an update on WSC's joint ventures with Nasdaq-listed Insituform Technology Inc to look into thermal insulation and related businesses.
'The first JV, Bayou Wasco Insulation Technologies, LLC, will see us setting up an insulation coating plant in the US, our first deepwater pipe-coating plant outside Malaysia.'' We are currently building the technical and sales organisation and target to commission by the beginning of 2012,' said Chan.
Bayou Wasco Insulation focuses on thermal insulation coating products to pipes or pipelines for projects in the US, Gulf of Mexico, Central America and the Caribbean Islands.
The second JV, WCU Corrosion Technologies Pte Ltd will promote high density polyethylene (HDPE) pipe lining system to the Asia Pacific market.
'Through this JV, we will also participate in onshore corrosion protection services, including engineering services, CONSTRUCTION [], installation, inspection, monitoring and maintenance and related product sales.'' We are targeting to secure our first project in Asia by mid 2012,' he added.
Chan also elaborated on the proposed demerger where the oil and gas business will be housed under Wasco Energy while WSC would transform into an industrial services player with renewable energy, trading and pipe manufacturing businesses as its core activities.
To recap, WSC started out in 1994 with its core activities in building material, trading and pipe manufacturing and it expanded into the oil and gas (O&G) industry. WSC's O&G unit, Wasco Energy, had evolved to become a major O&G player in this region.
The demerger, he said, would enable each entity to pursue a more focused and tailored business strategy to accelerate growth.
Chan said over the next five years, WSC would strengthen its industrial services where it would expand upstream and even own oil palm PLANTATION []s.
'We are confident that WSC will reinvent itself and become a major Asian industrial group after the demerger of its O&G unit.
'Renewal energy will be extensively developed, where the emphasis will be on strengthening our operations.'' Our expansion will likely see us going upstream, with a focus on the Afro Asia region palm oil sector.'' This could also see us becoming owner of oil palm plantations.
'This division is expected to propel the group's growth moving up the value chain to become a major player in the design and manufacture of mills and biomass and biofuel plants on turnkey basis,' he added.
As for WSC's trading business, Chan said it planned to tap into the vast opportunities in the Tenth Malaysia Plan and Economic Transformation Programme with the rolling out many infrastructure projects.
He said WSC's trading business would involve regional expansion to develop the company into Asean's major trading and logistics house.
WSC managing director and group chief executive officer Chan Cheu Leong said on Friday, June 17 the group was looking at organic and acquisition-driven growth for all its divisions.
He said this would see WSC boosting its biomass equipment and power generation business, as well as integrating into the fast growing agro-based sector and water industry.
In a statement released after its annual general meeting in Penang, he said another key growth area would'' be in deepwater pipe and gas pipe coating, where Wasco Energy Ltd had the TECHNOLOGY [] and capability to coat pipes for deepwater oil and gas production.
'After toughing it out against a volatile business environment last financial year, WSC again surged into solid profitability in the first quarter this year and is planning major programmes for its divisions,' Chan said.
In the first quarter ended March 31, 2011, its net profit surged 155% to RM43.4 million from RM17.0 million a year ago while revenue increased 19.8% or RM81.3 million to RM490.9 million.
As for FY2010, WSC's net profit attributable to shareholders fell 53.9% to RM55.98 million from RM121.3 million in FY2009 due to the impact from the economic and financial turbulence of 2008/2009.
'Last year, our core activities centred on the commencement of our RM551 million, 850km Gorgon pipe coating project in Australia, of which about 48% is now completed. We expect to fully complete this by first quarter of 2012.
'This project takes up a fair amount of our Kuantan facility's capacity and plans are underway to maximise capacity as new market potential is currently being explored,' Chan added.
As for WSC's book order, he said of the RM1.2 billion, about 74% was from its pipeline and engineering services divisions.
On WSC's pipe manufacturing, Chan said the company was evaluating opportunities to broaden into water related industries and was eyeing waste water treatment and water concessions.
Increased urbanisation and environmental degradation has provided opportunities in water and structural pipes operations, he said.
Chan also provided an update on WSC's joint ventures with Nasdaq-listed Insituform Technology Inc to look into thermal insulation and related businesses.
'The first JV, Bayou Wasco Insulation Technologies, LLC, will see us setting up an insulation coating plant in the US, our first deepwater pipe-coating plant outside Malaysia.'' We are currently building the technical and sales organisation and target to commission by the beginning of 2012,' said Chan.
Bayou Wasco Insulation focuses on thermal insulation coating products to pipes or pipelines for projects in the US, Gulf of Mexico, Central America and the Caribbean Islands.
The second JV, WCU Corrosion Technologies Pte Ltd will promote high density polyethylene (HDPE) pipe lining system to the Asia Pacific market.
'Through this JV, we will also participate in onshore corrosion protection services, including engineering services, CONSTRUCTION [], installation, inspection, monitoring and maintenance and related product sales.'' We are targeting to secure our first project in Asia by mid 2012,' he added.
Chan also elaborated on the proposed demerger where the oil and gas business will be housed under Wasco Energy while WSC would transform into an industrial services player with renewable energy, trading and pipe manufacturing businesses as its core activities.
To recap, WSC started out in 1994 with its core activities in building material, trading and pipe manufacturing and it expanded into the oil and gas (O&G) industry. WSC's O&G unit, Wasco Energy, had evolved to become a major O&G player in this region.
The demerger, he said, would enable each entity to pursue a more focused and tailored business strategy to accelerate growth.
Chan said over the next five years, WSC would strengthen its industrial services where it would expand upstream and even own oil palm PLANTATION []s.
'We are confident that WSC will reinvent itself and become a major Asian industrial group after the demerger of its O&G unit.
'Renewal energy will be extensively developed, where the emphasis will be on strengthening our operations.'' Our expansion will likely see us going upstream, with a focus on the Afro Asia region palm oil sector.'' This could also see us becoming owner of oil palm plantations.
'This division is expected to propel the group's growth moving up the value chain to become a major player in the design and manufacture of mills and biomass and biofuel plants on turnkey basis,' he added.
As for WSC's trading business, Chan said it planned to tap into the vast opportunities in the Tenth Malaysia Plan and Economic Transformation Programme with the rolling out many infrastructure projects.
He said WSC's trading business would involve regional expansion to develop the company into Asean's major trading and logistics house.
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