Gadang targets 2-digit growth

KUALA LUMPUR: Gadang Holdings Bhd is bullish on achieving double-digit growth in group revenue for the year ending May 31, 2007. 

The optimism is based on the existing as well as new construction and property projects, according to chief executive director Datuk Kok Onn. 

The group’s construction unit Gadang Engineering (M) Sdn Bhd (GESB) is bidding for contracts worth more than RM1bil in the private and public sectors and it expects to secure a sizeable number of projects within the next few months, he told StarBiz. 

“We are in negotiations with the government on the proposed Rehabilitation Hospital (Lady Templer) project worth about RM300mil,” he. 

Datuk Kok Onn

Kok said the group was confident of clinching some construction projects under the Ninth Malaysia Plan as well as projects under the private finance initiative scheme. 

“We are in early discussions with the government but the prospects of us securing those jobs are good,” he said. 

GESB currently has contracts in hand worth about RM430mil from the private and public sectors. 

“These include the construction of the commercial complex in the Mines Golf Resort in Sungai Besi, the marina development and infrastructure improvement work at Pulau Tioman, earth and drainage works in Terengganu and residential development in Shah Alam,” Kok said.  

With the projects expected to be completed by early 2007, he is confident they would start generating profit for the group in the current fiscal year. 

On GESB's mechanical and engineering (M&E) sector, Kok said the group had an order book of over RM30mil. Major projects include M&E works for the commercial building for the CIMB group and Jaya 33, an integrated commercial development in Jalan Semangat, Petaling Jaya. 

Gadang's wholly-owned property unit Gadang Land Sdn Bhd has a few upcoming property developments aimed at strengthening its local presence. These include 423 single-storey and semi-detached houses in Rawang with a gross development value (GDV) of RM47mil, and 54 three-storey terrace houses in Segambut, Kuala Lumpur with a GDV of RM30mil. 

Gadang Land is also developing 50 acres in Kuang, Selangor into a medium-end residential area. The project has a GDV of more than RM500mil and the company plans to launch the first phase by 2008. 

Besides the Klang Valley, the company intends to turn its 20 acres in Johor Baru into a commercial hub. 

“We will be utilising 3.8 acres to develop 40 shops and 512 serviced apartments with a combined GDV of about RM90mil. We plan to use the remaining land to build offices and an industrial park,” Kok said, adding that the company had yet to decide on the project's GDV and completion period. 

He added that the company was confident its property division would contribute substantially to the group's revenue in the next five years, leveraging on its existing projects with a total GDV of more than RM220mil, as well as upcoming projects. 

Its current projects include M Avenue, a commercial hub in Segambut; the 140-unit Seri Aman Heights residential development; as well as 600 medium-cost apartments in Shah Alam. 

On Gadang's business outlook, Kok said the company planned to aggressively grow its utilities ventures in Indonesia where it has three treated water supply concessions. 

“It is a big country and there is room for us to grow in the utilities sector,” he said. 

PT Taman Tirta Sidoarjo, which Gadang acquired last year, produces 200 litres of treated water per second.  

“The other two plants, which we acquired last month, are PT Bintang Hytien in Kota Tangerang that has a production capacity of 1,050 litres per second and PT Sarana Catur Tirtakelola (SCTK), located in Serang-Tangerang,” he said. 

Kok added that the SCTK plant was scheduled for completion early next year and would supply 400 litres of treated water per second. 

“We are confident that the utilities sector will contribute about 20% of the company's revenue by 2008. In terms of value, we expect its revenue contribution to reach RM50mil in 2010 from the current RM4mil,” he said. 

He added that Gadang was interested in setting up independent power producers (IPPs) overseas with two foreign companies. 

“We are still negotiating on the joint-venture agreement with potential partners and we hope to finalise it within the next six months. 

“We are eyeing Vietnam for our first power plant with an investment of about RM100mil,” he said, adding that the company anticipated the IPP sector would start generating revenue in 2010. 

For financial year ended May 31, 2006, Gadang posted a net profit of RM12mil, a surge of 140% from RM5mil recorded in the previous year. Revenue was RM185.6mil, up 49.6% from RM124.1mil earlier. 

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