IJM Corp was awarded two work packages worth RM246.7m for Murum Access Road in Sarawak. The first package involves constructing three minor bridges, culverts, drains and pavement works for a 20km road in Kapit for RM125.2m, while the second involves building two minor bridges and similar works for a 10.5km road for RM121.5m. The construction period for both packages is 24 months. (BMSB)
This contract win was based on open tender and represents the group's second win this year after clinching the RM600m Besraya Highway extension. Outstanding orderbook stands at RM3.8bn after adding this project, which also makes up part of the group's RM2bn new orderbook target for 2010. Pretax profit contribution is between RM6-9m p.a. based on a pretax margin assumption of 5-7%.
Supermax Corporation is optimistic of a bullish financial performance this year as its expects earnings per share (EPS) for 1Q10 to exceed its full year earnings guidance for the year of a minimum EPS of 62sen.
- It had projected a turnover of over RM1bn for the current financial year based on current latex prices, the expansion of two new plants and the installation of new production lines. Thai said the new production lines and the construction of two plants in Meru and Bukit Kapar, Klang, would require an investment of RM130m.
- "The plant in Meru is expected to be fully commissioned by June or July while the plant in the Glove City project in Bukit, Kapar, is expected to be commissioned by 2011," Thai said. For FY2011 Supermax projected a revenue of RM1.5bn. Thai said the rubber glove industry was a resilient industry and would not be affected by price increases nor the strengthening ringgit. (Bernama)
The selldown on
latex glove companies has been overdone, given the overwhelming demand for latex gloves internationally as well as their solid financial fundamentals, said
Supermax Corporation executive chairman Datuk Seri Stanley Thai. He said demand had indeed been outstripping supply in view of the H1N1 flu pandemic last year, which saw five-month back orders as at December last year.
- Thai said the global glove industry had been enjoying organic growth of 8-10% annually. "We don't foresee a supply glut for the next 1.5-3 years," he said. On the impact of higher latex prices and the stronger ringgit, Thai said these factors were non-issues as regional currencies were also appreciating in tandem.
- "These costs can be passed down to consumers and it's good that rubber tappers can also earn more," he said. (Financial Daily)
Top Glove Corporation can overcome the impact of rising raw material costs and foreign exchange fluctuations by raising product prices, according to executive director Lim Cheong Guan. Top Glove sees the recent sharp gains in
rubber prices and the ringgit currency as short-term fluctuations and will pass through any impact to its customers, said Lim. "Any impact will be short term.
Gloves are a necessity in the medical industry, any price increase is negligible to the end users compared with the total medical costs," added Lim.
- Apart from raising glove prices, Top Glove can hedge against rising ringgit by sourcing latex concentrate from Thailand which is transacted in US$, said Lim. The price of latex will likely to come down in May when the current supply squeeze resulting from the dry weather conditions eases, he said.
- Lim also brushed off market worries that the rubber glove industry is adding too many plants too fast. "Additional glove supply will come in gradually and if there is any oversupply, manufacturers will revise its expansion plan in order not to affect the supply demand situation." (Reuters)
More sustainably produced
palm oil is being purchased than ever before, according to the latest figures from the Roundtable on Sustainable Palm Oil. This is an encouraging turnaround that could point to a greater uptake of certified sustainable palm oil, WWF says. In the past, only a small percent of palm oil certified by the RSPO has been purchased, though the sales have been steadily increasing for the last several months.
- The RSPO said Friday that in March 2010, a record 136,000 tonnes (or corresponding certificates) were purchased from palm oil producers, exceeding the 126,000 tonnes that were produced that same month. (WWF)
Oil palm plantations and
timber processing mills in Sarawak have been asked to raise the basic salaries of Indonesian workers by at least 20%. Indonesian authorities made the request during a meeting in Bali last week to discuss ways to meet the demand for Indonesian workers by Malaysian companies,
- Indonesian Consul in Sarawak Rafail Walangitan said Sarawak plantation companies were asked to increase the daily wages of Indonesian plantation workers to between RM19 and RM22 from RM14 and RM18 presently. (Starbiz)
The detailed Environmental Impact Assessment (DEIA) for the
power plant to be set up in Felda Sahabat, about 100km from Lahad Datu,, Sabah will be submitted to the Department of Environment (DOE) this month. The 300MW power plant will use clean coal technology. It will produce emissions below the stringent DOE and World Bank's emission level limit guidelines.
- Lahad Datu Energy Sdn Bhd (LDE) project director Ahmad Faraid Mohd Yahaya said the plant would provide the much needed stability to the grid system in Sabah by serving as an anchor plant for the East Coast. (Bernama)
SK Telecom which has reportedly been approached by P1 to buy a stake in the latter, has yet to make any decision. "Nothing has been decided," Irene Kim, a spokesman of SK Telecom said. News reports had stated that SK Telecom was among a few foreign telcos interested in buying a stake in P1, a subsidiary of
Green Packet. The sale of a 20% stake in P1 could potentially raise about US$100m, the report said. Green Packet group MD and CEO CC Puan did not confirm nor deny the news. (Starbiz)
Pos Malaysia said it would be necessary to increase the price of domestic postage stamps in order to cope with current times. If Pos Malaysia does not increase the price, it will continuously incur operational loss of RM20m annually starting from this year, said group CEO Datuk Syed Faisal Albar. "The postage price increase is long overdue not only for our postmen but with the fact that our price is one of the lowest in the world," he added. (Bernama, BT)
Pos Malaysia will be offering new services and investing in its operations to boost revenue this year and turn the company around, its group MD, Datuk Syed Faisal Albar said. "For us, our natural mail volume decline is around 2-3%. With the tariff increase, surely the volume will decline more, but we will introduce some measures to ensure they don't decline further," he said.
- Syed Faisal said revenue growth this year would come from its new online shopping service, the parcel business and from the shared banking services it provides at the post office. (Bernama)
Kazakhstan's
Air Astana is planning to increase the frequency of its Almaty-Kuala Lumpur flights in the next one to two years after recording several full passenger load flights since its maiden flight to Malaysia last October. "We have 3,000 students from Kazakhstan studying in Malaysian and certainly one flight a week to Kuala Lumpur will not be enough moving forward," said vice-president for marketing and sales Ibrahim Canliel.
- According to Ibrahim, Kuala Lumpur was also a strategic transit point for flights from Central Asian nations, and Air Astana would continue to leverage on its "networking" with Malaysia Airlines to connect passengers from Almaty with destinations in Southeast Asia and Australia. (Financial Daily)
Long-haul budget carrier
AirAsia X is tipped to receive the rights to fly the Kuala Lumpur- Seoul route soon. A source indicated that the airline had been given a verbal approval by the government last week. When contacted, AirAsia X CEO Azran Osman-Rani said he had not received a written approval from the Malaysian Transport Ministry but welcomed the news.
- "We can help to redress the shrinkage of tourist arrivals from Seoul into Malaysia, which shrank by some 15% last year over 2008," he added. The airline has requested daily flights to Seoul and will look to utilise one of its brand new Airbus A330s to ply the route.
- As AirAsia X looks forward to expanding to South Korea, Azran said it was equally important for the airline to receive approval for other trunk routes such as KL-Sydney and KL-Jeddah to build its network. It is seeking daily flights to Sydney, while the Saudi government is willing to grant between five and six flights per week for the KL-Jeddah route, said Azran. (BT)
The deal to acquire the assets and liabilities of oil and gas company,
KNM Group, has fallen through due to a disagreement on pricing. The company said yesterday that the offer had lapsed by “mutual agreement of the parties,” as there was no agreement on the pricing. It is understood that a meeting between the buyers and the board of directors of KNM had taken place yesterday afternoon, prior to the announcement. (Starbiz)
Malaysia's
advertising spending rose by 22% yoy to RM1.62bn in 1Q10. The quarterly figure marked a return to the level seen just prior to the economic downturn. According to Nielsen, all monitored media posted growth except cinema. Terrestrial TV and the Internet expanded the most, each seeing 36% growth. Media Specialists Association (MSA) vicepresident Prashant Kumar expects a double-digit growth in adex this year. (Star)
The Association of Accredited Advertising Agents Malaysia (4As) plans to submit a proposal to the Health Ministry to tighten the self-regulation on alcohol advertising. President Datuk Vincent Lee said that he was informed a few months ago that the ministry was considering banning
alcohol advertisements in view of health issues and drink-driving accidents.
- “The 4As met with the Health Minister and his officials, who are concerned about youth binge drinking. The industry shares the same sentiment, but if there’s a total ban, the media industry would be affected as the alcohol companies spent RM100m last year on advertising and promotion,” he said. “Instead of a ban, we want to propose stricter regulations, similar to what we introduced for fast-food advertising three years ago.” (Starbiz)
OSK Property plans to launch RM700m worth of property projects this year, with the centre-piece being its RM300m GDV condominium project in Cyberjaya. "This is our biggest development project this year.
- With the Maju Expressway, the distance from Cyberjaya to KLCC only takes 25 minutes. This gives a lot of potential on the property demand in Cyberjaya," ED and COO Tan Boon Chuan said. This year, the company plans to develop seven parcels of its land. (BT)
OSK Holdings is confident its investment banking business will make up two-fifths of the group's revenue and bottom line this year, driven by the economic recovery. This will make investment banking the group's major contributor, surpassing its stockbroking business. OSK Investment Bank MD and CEO Ong Leong Huat said investment banking contributed 35% to the group's bottom line last year, up from 25% in 2007 and 2008. "In Malaysia, we anticipate investment banking to contribute between 45% and 50% of our income this year," he said.
- OSK currently has a foothold in Singapore, Hong Kong and mainland China, Indonesia and Cambodia. Ong expressed confidence that overseas contribution would increase to 35% this year and 40% next.
- OSK anticipates huge growth in Indonesia and Cambodia as the capital markets in these two countries are still in their infancy. "We will grow the branches in Indonesia from the current 10 to 15 by the end of this year, and in Cambodia we will have 10 branches, up from the current five." Capital investment allocated for overseas expansion so far amounts to RM400m, or 26% of the group's shareholder funds. (BT)
Kuwait Finance House (Malaysia) has opened a currency exchange outlet at the international arrival hall of the Low-Cost Carrier Terminal (LCCT) in Sepang, the second in the country. The first is at The Pavilion KL while the third will be opened at KL Sentral end of this month. Kuwait Finance House (Malaysia) CEO Jamelah Jamaluddin said the currency exchange was one of the core businesses of the bank's retail and consumer banking segment. (Bernama)
The Gombak
integrated transport terminal (ITT) has been revived and will be opened early next year, Transport Minister Datuk Seri Ong Tee Keat said. “The ITT aims to disperse 780 north and east-bound buses stationed in the city centre and ease the traffic congestion,” he said. It will have a capacity for 4,000 bus passengers a day. The RM200m terminal will be built in two phases on a 13.35ha land in Gombak. (Star)
BMW Malaysia is confident of a better performance in terms of sales and market share this year, compared to 2009, said managing director, Geoffrey Briscoe. 'We captured 40% of the 9,000 units in the premium market last year. Thus, we do not see any obstacles towards an increased stake, this year,' he said.
- Meanwhile, Mr Briscoe revealed that BMW Malaysia is considering bringing in more models to be produced locally, by the end of this year. 'We will be seeing more announcements from BMW Malaysia on this issue, later in the year,' he stated. (Bernama)
Masteel said local steel millers are expected to raise billet prices by US$70-80 or RM250 to offset rising iron ore and coke costs. "Billet prices have increased by US$90/MT to US$640/MT for Southeast Asian destinations since mid-March this year," said CEO and MD Datuk Seri Tai Hean Leng.
- "The surge in prices and demand for steel product is expected to expand our margin in coming months," he added. On Masteel's outlook, Tai said the company will invest RM300m to make more than just steel bars. "I will disclose the new products and production capacity soon," he said. (BT)
Ho Hup Construction has been granted a time extension of four months until Aug 4 to submit its revised regularisation plan to Bursa Malaysia Securities for approval. (Financial Daily)
UBG will dispose of its entire stake in UBG Petroleum (Thailand) to Pearloil (Siam) Ltd for about US$19.21m (RM61.46m). The disposal would provide an ideal opportunity to exit its investment in oil and gas exploration at a minimal loss and allow the company to refocus its strategy. (BT)
Kurnia Setia plans to construct a palm oil mill together with a compost fertilizer plant at its nearby Sri Jelutong Estate, Pekan, Pahang. The 30-tonne/hour upgradable to 60- tonne/hour palm oil mill is estimated to cost RM30m while the composting plant RM5m. The mill and plant will be due for commissioning by mid-11. (Bernama)
Hai-O has devised a networking marketing concept that can draw the interest of Indonesians to participate in its business. It has also introduced the member-consumer and consumer-entrepreneur concepts that will serve as a pulling force, premised on the belief that people will promote and sell products that are satisfied with. Hai-O Group founder and MD Tan Kai Hee said this during the official launch of PT Hai-O Indonesia. (Bernama)
A major shareholder of
Impressive Edge Group (IEGB) is proposing a selective capital repayment exercise. IEGB said the trading of its shares would be suspended with effect from 9am today pending the release of the material announcement. (Financial Daily)
Success Transfomer's subsidiary,
Seremban Engineering, an engineering firm that makes process equipment and metal structures, is bidding for contracts worth RM50m and expects to win 15% of the jobs, says ED.Penny Wong.
- The group, due to be listed on the Main Market of Bursa Malaysia next month, said it is bidding for work in Malaysia and abroad. Wong expects the company's numbers to grow this year by expanding its services to more industries, such as oil and gas and waste management.
- Seremban Engineering's initial public offering (IPO) entails a total issue of 28m shares, comprising a public issue of 19.9m new shares and an offer-for-sale of 8.1m existing shares priced at RM0.85/share, It will raise RM16.9m from the IPO, while Success Transformer will raise RM6.9m, (BT)
Mamee-Double Decker has committed to a 50% dividend policy to be paid on a semiannual basis. (BMSB)
