Minetech eyes more R.E. projects
06 Mar 2023
Minetech Resources Bhd (MRB) is optimistic about securing more renewable energy (RE) projects as the company sees ample opportunities to explore the RE space in Malaysia.
Executive chairman Datuk (Dr) Ts Awang Daud said that moving forward, the company will continue to explore opportunities to be the engineering, procurement, construction and commissioning (EPCC) and concession holder for RE ventures, as this is the right track for MRB, given the climate change and overall sustainability priorities in recent years.
“The RE segment is an important focus for the MRB since it allows us to participate in the green economy and offers recurrent revenue if the firm controls the facility, as we do with the floating solar power plant in Pantai Remis, Perak,” he told The New Straits Times.
Awang has emerged as a substantial shareholder and was appointed as the executive chairman of MRB since 2020.
He no longer has any interest in Serba Dinamik Holdings Bhd.
In January this year, MRB secured an engineering, procurement, construction and commissioning (EPCC) contract from Tesdec Hydropower Sdn Bhd worth RM36.71 million.
The contract is for a three-megawatt (MW) mini-hydro power plant at Sungai Pelagat, Besut, Terengganu.
The project, which is expected to commence in January 2023, followed by construction in 2025, is expected to be completed by May 2027 and comes under the Sustainable Energy Development Authority’s (SEDA) feed-in-tariff (FiT) programme.
“We are optimistic that there will be other RE projects we can explore in Terengganu and throughout the country.
“The mini-hydro project that we were awarded is our first EPCC project for RE, and our priority is to deliver the project on schedule while enhancing our capabilities and track record,” Awang said.
He noted that the company has never set a specific target for securing more RE projects in Terengganu.
“However, bagging the first project is essential for us not just stepping foot but also to ensure to deliver on time and with quality,” he said.
Awang also pointed out that hydropower provides benefits beyond electricity generation by providing flood control, irrigation support, and clean drinking water.
Hydropower is also affordable and provides a solution for rural Terengganu and flood mitigation.
While declining to comment further on the contracts and funding, Awang said financing initiatives for such projects have to be balanced against the needs of society.
“As a publicly-listed company, we welcome more such partnerships as they may provide the necessary financial support.
“Moving forward, we will continue to explore different concession holder, RE and EPCC projects, as we believe this is the right track for MRB given the climate change and overall sustainability priorities in recent years,” he said.
Executive director Matt Chin said the company has tendered for RM670 million worth of jobs and is seeking opportunities in the civil infrastructure jobs announced by the government.
“We have experience in certain packages of the mass rapid transit (MRT2) line, and there are lots of opportunities in the RM50 billion MRT3 line,” he said.
The company’s civil engineering arm’s order book stands at RM62 million currently.
As for the company manufacturing arm, Chin said MRB produces bituminous products for pipe coating, waterproofing and sealing mainly for concrete structures or building works and road construction projects, which complements the civil engineering division.
“We are upbeat on the division, as it relies on domestic orders and orders from Asian markets.
“We have also expanded the production capacity for coating enamel products as spare capacity has narrowed given the utilisation rate of 90 per cent of 480MT per month.
Our bitumen storage tank has been expanded with a heating system to capitalise on opportunities to purchase bitumen at low prices in bulk.
“Furthermore, we invested in doubling up coating enamel production capacity to 1,000MT, which will complete by the end of March 2023 to cater for strong demand growth,” he said.
For the third quarter (Q3) ended 31 December 2022 (FY23), MRB’s revenue gained 58.6 per cent to RM36.3 million compared to RM22.9 million in Q3 FY22.
The company recorded a profit before tax (PBT) of RM0.2 million compared with a loss before tax (LBT) of RM3.1 million, while EBITDA has recorded its highest improvement of 166 per cent compared to Q3 FY22.
By segment, the civil engineering division registered a 41 per cent rise in revenue to RM22.0 million in Q3 FY23 compared with RM15.6 million reported in the same quarter the previous year.
The bituminous products division’s revenue grew by 150 per cent to RM10.0 million compared with RM4.0 million, while the services division recorded a 60 per cent increase in revenue to RM3.2 million compared with RM2.0 million.
For the nine months (9M) FY23, the company registered a 45.3 per cent increase in revenue to RM87.3 million compared with RM60.1 million in the same period last year.
LBT narrowed significantly by 76.2 per cent in 9M FY23 to RM2.9 million compared with RM12.2 million in 9M FY22.
Awang said the company had seen two quarters in which revenue has risen due to higher contributions from the civil engineering and manufacturing divisions.
“We are cautiously optimistic but note that the pace of domestic economic growth will likely slow down in the coming months,” he said.