03 April 2010

Boustead Heavy Keen to Build More Naval Patrol Vessels

3 April 2010

KD Pahang - one of Malaysia's first batch of next generation patrol vessel (photo : Defense Update)

BOUSTEAD Heavy Industries Bhd (BHIC) is looking at building the second batch of patrol vessels for the Royal Malaysian Navy (RMN).

"We are aggressively looking at getting in new projects, including deals with the government. With the first batch of the patrol vessels coming to an end, we are proposing a second batch of patrol vessels," BHIC managing director Tan Sri Ahmad Ramli Mohd Nor told reporters after its annual general meeting in Kuala Lumpur yesterday.

In 1998, the government awarded a contract to Boustead Naval Shipyard Sdn Bhd, a subsidiary of BHIC, to construct and deliver six patrol vessels to the RMN. The last two patrol vessels are currently undergoing final outfitting work.

On the possibility that the government might hold off plans to commission more patrol vessels to conserve funds, Ahmad Ramli is confident that the government will see the long term benefits of such a programme.

"Our second batch will be working on very high local content which would translate as stimulus to the economy. A project of this size would also not be short term in nature but could spread over two Malaysia Plans," he said.

On the number of vessels it is proposing, Ahmad Ramli said it will be a project that will be able to create the volume needed for further technology acquisitions.

"Its a spin off issue for the industry. We are very active in developing vendors. The onus will be on us to convince the government to proceed with such a project," he said.

BHIC is still dependant on defence projects, a year and a half after making a decision to diversify its income stream.

Currently, 70 per cent of its shipbuilding business, which makes up the bulk of contribution to revenue, comes from the defence sector while 30 per cent is from the commercial sector.

The company's shipbuilding order book stands at RM2.2 billion.The company is also involved in ship repair work, and is a licensed Petronas fabricator for the oil and gas industry.

Ahmad Ramli is confident that 2010 will be a better year than 2009 for the company.

"There is a recovery which is slowly translating into activities, and short of anything unexpected like the 2008/2008 crisis, we are confident that the market will be much better than 2009," he said.

BHIC's 2009 net profit dropped by more than a third to RM76.6 million in 2009 from 116.9 million in 2008, due to higher project costs and lower share of profits in associates last year.

(New Strait Times)

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