20100409 1312 Malaysia Corporate News.

Sime Darby said its 50%-owned Emery Oleochemicals has submitted a bid for Kulim's oloechemical plant, estimated to be worth around RM300m. An industry source without knowledge of the bidding process said Sinar Mas Group was also bidding for the plant, which accounts for the whole of Kulim's oleochemical business. The plant has an annual capacity of 430k tonnes. A Sime spokeswoman said the bidding was at a very early stage and the company was waiting for further developments. (Financialdaily)
Kulim's oleo division posted an EBIT of RM32.9m in FY12/08. As such, based on the price tag of RM300m, we estimate the oleo business is valued at historical P/E of 12.3x, which we believe is fair. As such, we would view this potential acquisition to be neutral for Sime Darby.

Malaysia's palm oil inventories in March may have declined 5%-6% to around 1.68m- 1.70m metric tons despite strong growth in production, as export demand for palm oil also improved; trade participants and plantation company executives said Thursday. Plantation company executives said March crude palm oil output rose 7%-16% from the previous month. However, end-March inventory numbers will likely decline because production may not be high enough to meet consumption, a senior trading executive based in Kuala Lumpur said. Export estimates by two cargo surveyors showed rising exports for March. Intertek Agri Services said shipments rose 12.1% to 1.35m tons, while SGS (Malaysia) Bhd. said exports were up 7.7%, also at 1.35m tons. (Dow Jones)

MISC will list its subsidiary Malaysia Marine & Heavy Engineering (MMHE) on the Main Market of Bursa Malaysia. MISC is taking steps to formulate the listing scheme and will accordingly appoint the advisers. Further details on the Proposed IPO will be made known upon finalisation of the scheme. (BMSB) Assuming a listing P/E of 10-12x and net profit of RM300m in CY11, MMHE may be listed at a market capitalisation of between RM3bn and RM3.6bn. MISC currently owns 100% of MMHE, and a minimum of 25% will be listed to comply with the free float requirements.

Petronas has identified MISC's Malaysia Marine and Heavy Engineering (MMHE) and its petrochemicals business for the listings. Petronas CEO Datuk Shamsul Azhar Abbas said the two new listings will allow the investing public to participate directly in some of Petronas' businesses. Petronas already has four firms listed on the stock exchange now. They are MISC, Petronas Gas, Petronas Dagangan and KLCC Property Holdings.

• MMHE registered revenues of over RM4bn in FY09, driven by three core businesses, namely engineering and construction services, marine conversion and marine repair. It has grown to become an integrated engineering, procurement and construction contractor and liquefied natural gas (LNG) tanker repair specialist with in-house capabilities. MMHE runs a yard in Pasir Gudang, Johor, one of the largest in the region and the only one capable of converting big ships into vessels that can process and store oil and gas. These are known as floating, production storage and offloading (FPSO) units and floating storage offloading units. The yard is also used to fabricate high tonnage offshore oil and gas structures. 
• Petronas' petrochemical business registered revenue of RM13bn in FY09. Its diverse product portfolio ranges from olefins and polyolefins, fertilisers, industrial to specialty chemicals. The business started with a capacity of 600,000 tonnes per year and has since grown to over 10m tonnes of petrochemical production, with a significant regional market presence. The commencement of commercial operations of the mega methanol plant in Labuan in May-09, with a world-scale capacity of 1.7m tonnes per year, further strengthens its position as the biggest methanol producer in Asia Pacific and fourth globally. (BT)

Palm oil prices can possibly touch RM2,800-3,000/MT this year due to strong demand and the El-Nino weather phenomenon, IOI Corp executive chairman Tan Sri Lee Shin Cheng said. He said prices had been falling in the last month because of the strengthening ringgit against the US$. He expected a drop in IOI Corp’s oil palm output by about 8% yoy this year because of the effects of El-Nino. (Bernama)

Members of the RSPO said they have increased purchases of certified production to accelerate an initiative hit by charges that palm oil is harmful for health and the environment. Unilever said it would more than double this year to 400,000 tonnes its purchase of production certified as sustainable. (Financial daily)

Tenaga has allocated RM1.3bn, higher than the RM926m spent in FYE8/09, to upgrade its distribution system for FYE8/10. This is part of TNB's continuous efforts to provide quality electricity supply. "The RM1.3bn expenditure involves building 39 main distribution substations," said Senior GM of Asset Management, TNB Distribution Division, Ismail Mohd Din. According to Ismail, TNB will also spend RM715m for maintenance in FYE8/10, higher than the RM646m previously. (Bernama)

Tenaga’s president/CEO Datuk Seri Che Khalib Mohamad Noh has been named CEO of the Year at the inaugural Asia Power and Electricity Awards 2010. (Bernama)

RHB Capital may do more acquisitions this year to become a stronger player in the region, its chief said. Group MD Datuk Tajuddin Atan said there were no specific acquisition targets at the moment, but the group would be interested in businesses - either at home or in the region - that would make a strategic fit.

• "I'm not ruling out (buying) another bank, but what we're saying is, as long as a strategic fit comes into the picture, we will look," he said. Tajuddin said the RHB group was "not at this point in time" interested in making a bid for EON Capital. "I've been asked ... but we're not looking in that direction," he claimed. (BT)

Hong Leong Bank sees the possibility of loans growing 9-10% this year on an improving economy. Its MD Yvonne Chia said that loans would increase faster this year as the country's exports recover in tandem with a stronger world economy. She did not provide comparative figures.

• "Our lending to the commercial and business sector dropped in the last 18 months because trade finance fell drastically. We see that coming back this year," Chia said. The bank is expecting deposits to show "exemplary growth" this year as it adds more branches, Chia said. 
• Chia also said that the bank would spend RM20m to set up 10 branches in the next 18 months. At present, there are 188 branches. (BT)

The EPF has rejected allegations that it is involved in insider trading of MRCB shares as none of EPF’s investee companies including MRCB had a contract or agreement for the development of the Sungai Buloh land. (Starbiz)

MRCB is eyeing land in Iskandar Malaysia for property development projects. ED Datuk Ahmad Zaki Zahid said the company was looking to develop projects on a JV basis with land owners or other parties. Meanwhile, Zaki said that MRCB was on track to complete the Easter Dispersal Link Expressway (EDL) project by end-2011 and it would be opened to motorists by Feb-2012. (Starbiz)

The Labuan Chamber of Commerce (LCC) has proposed the opening of a casino in Labuan to attract more tourists and give a boost to its economy. “A casino could be the answer and it is also compatible with Labuan’s status as a free port,” chairman Datuk Francis Tee said. He suggested that the casino could be in the form of a floating ship, departing from the island at 6pm and returning at 6am with strict checks to prevent the wrong people from patronising it. (NST)

London Biscuits has served a notice to voluntarily buy all the remaining 54.4m shares in TPC Plus it does not already own. It is offering 30 sen/share, or a total of RM16.32m. The offer price is at a 3.63% premium over the five-day VWAP of TPC shares. (BT, Financial Daily)

Maybank Singapore was conferred the inaugural Exemplary Employer Award by the Tripartite Alliance For Fair Employment Practices (TAFEP) during a Conference on Fair Employment Practices. Maybank said the award was in recognition of the bank's efforts in implementing progressive and fair employment practices. (Bernama)

Bank Islam Malaysia will gain instant entry into the lucrative Islamic pawnbroking (Ar- Rahn) industry by buying an 80% stake in Islamic pawn broker Farihan Corp (FC). FC operates an Ar Rahn outlet in Pasir Puteh, Kelantan, which has an annual turnover of RM6m. "Currently the market is under-served with only three other players, so we see a lot of potential for growth in the industry," Bank Islam Malaysia MD Datuk Seri Zukri Samat said.

• Meanwhile, Bank Islam said it is in no need for capital for the time being as its reserves were almost double that required by Bank Negara Malaysia. Besides, Bank Islam Malaysia has not received any word from its Middle East shareholder Dubai Group on the potential sale of its shares. (BT)

AmBank became the first bank in Malaysia to implement the wireless network Automated Teller Machines (ATM) using Global System for Mobile Communications protocol. Breaking away from the traditional Fixed Leased Lines, AmBank’s ATMs have started using Secured Wireless Connectivity utilising existing wireless signal like 3G, provided by Celcom and DiGi. (Bernama)

SME Bank wants to expand its net loan growth by 8-9% this year from RM3.7bn last year, its top official said. MD Datuk Azmi Abdullah said the bank aims to increase its business through strategic alliances and by aggressive marketing. "We hope to increase our customer base which is close to 7,000 to-date," he said. As at February 2010, SME Bank's net loan asset stood at RM3.9bn, said Azmi. The bank grew its net loan assets by 14% last year but from a smaller base. (BT)

AirAsia and VietJet Aviation Joint Stock Company (VietJet Air) signed a strategic partnership agreement in Hanoi yesterday. AirAsia had earlier acquired a 30% equity stake in VietJet Air, which is launching a Vietnam-based low-cost airline. The trade name is tentatively VietJet AirAsia, and will operate both domestic and international flights. VietJet Air CEO Nguyen Duc Tam and AirAsia Group CEO Tony Fernandes also announced that they have entered into an engineering support services agreement. (AirAsia Press Release)

Naza Group plans to open five "Naza World of Bikes" sales and service centres for motorcycles in the Klang Valley and at least one in every state that will cost a minimum of RM25m in total investment. Group executive VP of operations Datuk SM Zulkifli SM Amin, said it expects to have all the planned Naza World of Bikes up and running by Mar-11, featuring the likes of Ducati, Harley Davidson and other brands from Europe. (BT)

Pos Malaysia expects both revenue and net profit to increase this FYE12/10 following the rise in domestic postage charges, although virtually all of its 16,000 employees will receive a pay increase. Group MD Datuk Syed Faisal Albar said he expects domestic mail volume to drop as a result of the increase in postage tariff. Nevertheless, he expects the doubling of postage tariff to make up for the loss in volume. Management also gave assurance that its Business Transformation Plan will not be derailed as a result of Khazanah selling its stake. (BT)

Jaks Resources has signed various memoranda of agreement with authorities and government agencies in Vietnam on the proposed development of a 1,200MW thermal power project in Hai Doung.

• The project will be developed under a build-operate-transfer (BOT) structure and run as an IPP with 25-year PPA with the state-owned national utility company, Vietnam Electricity. 
• Construction of the project is slated to start in 4Q2010 and commercial operation for the first unit of 600MW is scheduled in 4Q2014. 
• It also entered into a memorandum of agreement with Vietnam National Coal-Mineral Industries Group for coal supply in the Quang Ninh province. (Bernama)

KNM said the RM1.4bn tax incentive granted for the acquisition of Borsig will be applied against the total taxable income generated in Malaysia by wholly-owned KNM Process Systems Sdn Bhd. (BMSB)

EPF sold a further 12.5m shares in KNM, reducing its stake to 9.76%. (Star)

Bina Puri has won a 62.8m baht (RM6.22m) contract from Melewar Intergrated Engineering Sdn Bhd to design and build a warehouse for Siam Ice Co Ltd. With the award, Bina Puri’s order book now stands at RM1.8bn. (BT)

MTD Capital says the Toll Regulatory Board of Philippines has issued a toll operating permit for projects 1 and 2 of the South Luzon Expressway to Manila Toll Expressway Systems Inc (Mates), its indirect associate company. (BT)

Ireka Corp has bagged a RM36.2m contract from the Iskandar Regional Development Authority to build the proposed Bandar Indahpura, Kulai-Second Link Expressway interchange. The job, which is expected to be completed in Oct-11, is part of the projects in Iskandar Malaysia. (BT)

KFC Holdings said sales contribution from its RasaMas restaurants will continue to be less than 10% as it expands its KFC outlets locally and overseas this year. This year, KFCH plans to add five more RasaMas outlets with a total investment of RM2.5m. Four restaurants will be located in the Klang Valley. The company plans to open up to 40 KFC outlets this year. There are currently 476 KFC outlets in Malaysia. (BT)