The energy engineering solutions provider, which has also adopted an asset ownership model for further growth, said its wholly owned subsidiary Serba Dinamik International Ltd (SDIL) had inked a joint-venture (JV) agreement with JTL to develop the chlorine skid mounted chlor-alkali plant, which has a capacity of 45 tonnes per day, in Mlandizi ward, Kibaha District’s coast region.

The plant is expected to be developed on 15,787 square metres of industrial land in the Msufini area, Serba Dinamik said in a filing with Bursa Malaysia yesterday.

JTL is a leading supplier of water-related solutions supplying its products and services, mainly water meters, water pumps, water treatment chemicals, pipes and fittings to water utilities, manufacturers, re-sellers and non profit organisations.

The company is also involved in the importation and installation of firefighting equipment for the Tanzanian market.

SDIL and JTL will, either directly or through affiliates, form a special-purpose vehicle in Dubai, which will ultimately hold 100% shareholding in the project.

SDIL will hold a 25% stake in the JV company, to be named Msufini LLC. Msufini LLC will, in turn, hold a 100% stake in Msufini Chlor Tanzania Ltd, which will be the direct owner of the plant.

The JV agreement that was signed last Friday sets out the understanding with regards to the project pending the execution of the definitive agreements, which will include the shareholders’ agreement; the engineering, procurement, construction and commissioning (EPCC) contract; the operation and maintenance (O&M) agreement; deed of adherence and any other agreements as may be determined by the parties.

Serba Dinamik will provide structure local content provision in all aspects and phases of the JV agreement, including sub-contractors, manpower, raw materials, consumables, housing, fabrication, and installation.

JTL will, however, have the first right of refusal to supply or subcontract such works where possible, excluding original equipment, propriety technology, methodology and installation.

SDIL will be the appointed O&M contractor for a period of 10 years plus an additional five years. A price agreement structure will be in place throughout the tenure of the O&M agreement.

On the rationale for the JV agreement, Serba Dinamik said it would create an opportunity for SDIL to secure the EPCC contract, valued at US$69.8mil (RM295.4mil).

“Apart from the EPCC contract and as part of the JV agreement, SDIL will be appointed as the O&M operator… which will enable SDIL to benefit from a steady income flow in the long term,” it said.

“In addition, as a shareholder of the JV company, SDIL may also reap benefits in the form of dividends and track record, being its first foray into Africa.”

Serba Dinamik said the JV agreement is expected to be completed by the first quarter of next year.

Serba Dinamik first launched its asset-management model with a compressed natural gas plant in Muaro Jambi, Sumatra, in Indonesia.

Source: The Star

ACETP is hosting the forum in Sichuan province’s capital Chengdu in collaboration with Chinese data company, Chengdu Realty Technology Corp Ltd. The forum, which will take place on Jan 13-14, 2018, aims to promote cooperation between ASEAN countries and China under the Belt and Road Initiative.

In Malaysia today, ACETP Malaysia president Datuk Ng Kek Kiong said the forum will focus on project and business match making through discussion of policy analysis, investment and financing channels, besides cooperation strategies.

“The summit is expected to result in at least US$1.5 billion worth of property investments in China, in terms of gross development value, from 20 handpicked Malaysian companies,” Ng said.

He was speaking to reporters here today after the Belt & Road Property Development Forum’s memorandum of understanding (MoU) signing ceremony. Ng signed the MoU on behalf of ACETP while Chengdu Realty Tech Corp was represented by its chairman Luo Hongwei.

Ng said Malaysian investments in China can be streamlined and made simpler through the professional supply of comprehensive real estate data on policies, land bank, supply, transactions, product types, customer database by Chengdu Realty Tech Corp.

Source: The Edge Markets

According to Kelington, the contract was awarded to its wholly-owned subsidiary Kelington Engineering (Shanghai) Pte Ltd, which specialises in providing engineering services.

“We are benefitting from the growth of the semiconductor industry in China which is largely driven by the ‘Made in China 2025’ government initiative to increase China’s production of electronics and semiconductor products,” Kelington chief executive officer Raymond Gan said in a media statement today.

“The works will be commenced immediately and is expected to be completed by April 2018,” Kelington said in a filing with Bursa Malaysia today, adding that the works will be funded through internally generated funds and bank borrowings.

It is worth noting that the integrated manufacturing systems project is owned by US-headquartered semiconductor wafer foundry firm GlobalFoundries and Chengdu Municipal Government in China.

On Feb 10, GlobalFoundries announced that it is investing over US$10 billion to build a manufacturing plant in Chengdu Hi-tech Industrial Development Zone in China, to produce a 12-inch wafer — a semiconductor wafer used in integrated circuits.

The plant in Chengdu was said to commence its operations beginning from the fourth quarter of 2018.

At noon break, shares in Kelington rose 2.5 sen or 3.91% to pause at 66.5 sen today, valuing the engineering services provider at a market capitalisation of RM152.84 million.

Source: The Edge Markets

The group announced this in a filing with Bursa Malaysia today, saying it will pay RM1.55 billion to assume full ownership of the O&G field.

The plan, first announced in July 2016, involves the acquisition of Markmore Energy (Labuan) Ltd (MELL) for US$205 million from Markmore Sdn Bhd, which is owned by businessman Tan Sri Halim Saad, who is also a substantial shareholder of Sumatec.

MELL, through its wholly-owned subsidiary Markmore Central Asia BV, holds the entire participatory interest in CaspiOilGas LLP (COG), who in turn is the concession owner and operator of the Rakushechnoye O&G field.

Sumatec’s managing director Abu Talib Abdul Rahman had told reporters after the group’s annual general meeting on June 15, that the group will likely abort the plan and would instead focus on its gas utilisation plan, which includes building a liquefied petroleum gas (LPG) plant In Kazakhstan.

Today’s announcement, however, made no mention of Abu Talib’s statement.

Instead, the group said it has signed a heads of agreement with Markmore Sdn Bhd to acquire a 100% stake in MELL. The agreement is to lead to a share sale agreement within six months, failure of which would lapse the initial agreement.

It said RM1.22 billion of the purchase price will be paid in cash and the balance via the issuance of 1.68 billon new shares at 20 sen per share (equivalent to RM336 million).

Sumatec is currently the designated operator of the Rakushechnoye field, after sealing a joint investment agreement in March 2012 with MELL and COG, under which it is allowed to carry out all operations relating to the production of oil from the Rakushechnoye field.

The agreement entitles Sumatec to 100% of the profits for the first two million barrels of produced oil, and 50% of it thereafter.

The group said the proposed acquisition is expected to enable it to effectively own the entire oil and gas reserves at the Rakushechnoye field, as well as to enhance the effectiveness and efficiency of operations there.

“It is also a step in increasing the hydrocarbon reserves for Sumatec to arrest the natural production decline of the hydrocarbon production, thereby ensuring the continuous growth of Sumatec,” the filing added.

Sumatec’s board has also proposed to undertake various corporate exercises to address current financial issues. This includes a rights issue to raise a minimum of RM1.52 billion.

The rights issue involves the issuance of 7.61 billion new shares, together with 3.04 billion warrants and 1.01 billion bonus shares on the basis of 15 rights shares, together with 6 warrant and 2 bonus shares for every 2 existing shares at an indicative issue price of 20 sen per rights share.

The final issue price and exercise price of the warrants will be determined by the board at a later date.

Sumatec’s share price closed unchanged at 5 sen today, giving it a market capitalisation of RM182.63 million.

Source: The Edge Markets

Group managing director Chris Chuah told StarBiz that the group was now finalising the details and cost of the project.

While the construction of the entire farm will take up to five years, it is hoped that by the second year of construction, the Indonesian operations will have the capacity to produce some four million broilers per month and three million eggs per day.

“The construction work on the project will start by the first half of next year in Java, and should take three to five years to complete,” said Chuah.

On Dec 7, 2015, CAB had signed a joint-venture agreement with Salim’s special purpose vehicle (SPV) company in Indonesia for the purpose of establishing a fully integrated poultry business in Indonesia.

Under the agreement, the SPV would set up and hold a 90% stake in the new joint-venture company and CAB Cakaran to hold the balance 10%. However, CAB Cakaran will have the option to increase its shareholding up to 30% in the next three years after the initial set-up, depending on its financial condition.

At about the same time, the Salim Group also bought a 9.1% stake or 15.06 million shares in CAB Cakaran through a private placement at RM2.07 apiece. To date, the Salim Group, via its entity Plant Wealth Holdings Ltd, holds a 17.12% stake in CAB Cakaran.

The Chuah family remains as the largest shareholder of CAB Cakaran with a cumulative 47.46% stake in the group.

Chuah said the project was in line with the forecast that Asia would be the driver of increasing global poultry consumption in future.

“According to an Orissa International report, global poultry consumption is predicted to grow by 27% to 28 million tonnes by 2023 – with 40% of that growth in Asia.

“In South-East Asia, the growth of incomes, population, urbanisation has translated into a growth of demand for animal products.

“The surge in demand for animal protein resulted in a significant increase of meat – mainly poultry and pork.

“Poultry is the largest livestock sector in Malaysia, Thailand, and Indonesia,” Chuah said.

Malaysia’s poultry meat per capita consumption is among the highest in the world, Chuah said.

He added that Malaysians consumed 1.8 million chickens and 2.8 million chicken eggs daily. “Indonesian poultry production € is estimated at 10bil (RM49bil) in 2015 with broiler meat accounting for three-quarters of the total.

“The poultry meat sector is projected to grow 70%-90% by 2020 if GDP increases by 6% per annum.

“The layer industry is also projected to grow at 50%-60% of the broiler sector,” he said.

According to Chuah, the group expects export sales to generate 25% of the group’s revenue for the 2018 fiscal year ending Sept 30, compared to 20% in 2017.

“The group’s processed food are sold to markets in Myanmar, Maldive, Singapore, and Brunei, while the live birds are exported to Singapore,” he added.

For its 2017 financial year ended Sept 30, Chuah said the group was confident of achieving a strong double-digit percentage growth over 2016.

“This is because for the nine months of the 2017 financial year, we have already achieved a revenue of RM1.08bil compared to the RM1.1bil achieved for the whole of 2016.

“Our net profit for the nine months of 2017 is already RM31mil compared to RM25.9mil in 2016,” he said.

He expects sales for its first quarter ended Dec 31, 2016 to improve by about 10% compared to the previous corresponding period.

On the first quarter for 2018 financial year ending Dec 31, Chuah said the group expected improvement in sales over the previous corresponding period.

“Since last year, due to the uncertainties in the economy, many Malaysians have chosen to stay back home or travel within the country, which has increased the demand for broiler meat,” he said.

Source: The Star

Kuala Lumpur Kepong Bhd (KL Kepong) is proposing to buy Elementis Specialities Netherlands BV (ESN) in Delden, the € Netherlands for 39mil or RM187.2mil.

In a filing with Bursa Malaysia yesterday, the plantation company said its unit Kolb Distribution AG had inked a deal with Elementis BV to acquire its entire interest in ESN, together with its working capital, assets and surfactant chemicals business.

The proposed acquisition will be funded by a combination of KL Kepong’s existing cash reserves and bank borrowings, the company said, adding that the proposed acquisition is expected to be completed in the first half of 2018.

“The Delden site will expand the existing Kolb business portfolio in terms of product range and market coverage. The use of the Delden site as another hub for the KLK Group’s market penetration strategy will further accelerate growth in the group’s downstream chemical specialities business in Europe.

“The Delden production site is serviced by good rail and road links and is located strategically close to key customers and raw material supply routes.”

KL Kepong said the proposed acquisition will not have any effect on its issued and paid-up share capital as the acquisition is to be settled in cash.

For its fourth quarter ended Sept 30, 2017, KL Kepong’s net profit dropped to RM242.12mil from RM375.06mil in the previous corresponding period, while revenue increased to RM5.16bil from RM4.54bil a year earlier.

For its financial year ended Sept 30, 2017, the company’s net profit fell to RM1.07bil from RM1.68bil in the previous corresponding period, while revenue rose to RM21bil from RM16.51bil a year earlier, boosted by higher profits from its plantation sector.

The company said crude palm oil (CPO) prices were recently supported by a slower-than-expected recovery in fresh fruit bunch production post El-Nino, resulting in tighter inventory than envisaged.

“Going forward, 2018 palm oil production is projected to recover strongly and coupled with an environment of ample supply of oil seeds, this may put pressure on CPO prices.

“Notwithstanding these factors, we expect our plantations’ profit for financial year 2018 to be satisfactory,” said KL Kepong, adding that the performance of the oleochemical division should improve from last year’s results.

The company said management’s efforts to turn around the under-performing business units have produced encouraging results. “Overall, the company’s profits for the financial year 2018 should be better.”

Source: The Star