Zelan Aims To Be Niche Player In Ipp Industry

Zelan Aims To Be Niche Player In Ipp Industry

29 August 2008

KUALA LUMPUR: Construction major Zelan Bhd hopes to be a niche player in the power generation business, particularly in the construction of power plants in the region, where there is great demand for power infrastructures to support their strong economic growth, said its chief executive officer Chang Si Fock.

"Since we completed the Tanjung Bin power plant in Johor, we have carved a name for the company in this industry. Many countries began to take note of our expertise and this opened up a new opportunity for Zelan."

"Going forward, we would be looking at countries such as Indonesia, India, the Middle East and also Vietnam, which are experiencing booming economies," Chang told reporters after the company's AGM here on Aug 29.

Zelan's total outstanding order book stood at RM3.6 billion as of June this year, with around 60% of it from the power sector and 36% from the building sector. It is also bidding for jobs worth around RM800 million so far this year, mainly in foreign countries.

"Zelan's diversifications into power plant and the setting up of the new IPP division enables the company to widen its bidding options," said Chang.

According to Chang, about 90% of the group's revenue comes from overseas, as Zelan has been aggressively spreading its wings to other countries to mitigate the slowdown infrastructure and construction projects at home.

"If there is revival in demand for power related infrastructures or the construction industry in general, we may refocus our resources here again. But for now, most of the opportunities are coming from external markets," he said.

Some of the highlights of the group's successful foray overseas are the Shuqaiq power plant project in Saudi Arabia worth RM900 million and the Meena Plaza project in the UAE valued at RM796 million.

For the 14 months financial period ended March 31, 2008, net profit came in at RM143 million, 77% higher than RM81 million recorded in the corresponding 12 months period last year, due to improved showing from the group’s various business units

Revenue jumped 114% to RM1.4 billion from RM641 million. Engineering and construction continued to be the main activity of the group, raking in RM1.1 billion or 81% of its revenue, while property and development contributed RM209 million with the balance from manufacturing and other investments.

The total dividend for the just concluded financial period amounted to RM66 million with gross dividend declared totaling 14 sen per share.

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