PETALING JAYA: Water treatment-based Salcon Engineering Bhd wants to expand its business to more Asean countries as well as China, India and Sri Lanka, says its chief executive officer Lim See Teok.
The company recently secured a 20-year contract to supply clean water to Ho Chi Minh City on a “build, operate and transfer” (BOT) basis and it is currently building the Min Buri water treatment plant to increase water supply to the eastern suburban area of Bangkok.
Salcon Engineering, which is 70% owned by public-listed Kumpulan Emas Bhd, had also set up a business office in Shanghai because the company saw huge opportunities in China's water and waste water treatment industry, Lim said in an interview.
Some 82% of its revenue is from its water sector, 9.21% from waste-water activities and the balance from trading activities.
For the last financial year ended July 31, 2002, the company chalked up a turnover of RM153mil and after-tax profit of RM13.6mil.
Lim said: “We have closed our first half of the financial year ended Jan 31, 2003, and recorded a total turnover of RM123mil and RM11.5mil in profits.
“In the first half of our (current year's) operations, we have managed to chalk up more than 80% of the last full financial year's revenue. We are confident we will be able to generate significantly far better results than the last financial year.”
Lim said Salcon Engineering was looking into various plans to expand its operations outside Malaysia from where it would get 30% or 40% of its revenue.
“With an excellent track record of handling more than 500 projects involving water and sewage treatment for 28 years, Salcon Engineering is ready to prove that a Malaysian company has the capability and expertise to compete with companies from developed countries in the global market,” he said.
Although the potential to expand in the water treatment industry was tremendous, he said Salcon Engineering would have to compete with other major players, mainly British and French, in many aspects like design, reputation and technology.
Lim said the main task was to change the mindset of that Western technology in water treatment was far superior.
He said Salcon Engineering's successful track record included the construction, operation and maintenance of the RM80mil Phase III Sungai Terip Water Treatment Plant in Negri Sembilan, introducing the first Dissolved Air Flotation (DAF) system in Malaysia in 1997, constructing the biggest water treatment complex in Asean early 1990s and building the largest sludge dewatering plant in Johor Baru for Singapore's Public Utilities Board.
Salcon Engineering, which is 30% owned by Mampu Alam Sdn Bhd, is to acquire the listing status of light fittings company Seng Hup Corporation Bhd in July via the incorporation of a new company, SALCON BHD.
Under the proposed scheme, Seng Hup, currently a second board company on the KLSE, will transfer its listing status to Salcon Bhd, which is to be listed on the main board.
The proposed acquisition by Salcon Bhd of the entire issue and paid-up share capital of Salcon Engineering for RM80.2mil will be satisfied through the issue of 160 million shares by Salcon Bhd at an issue price of 50 sen per share.
This reverse takeover exercise is likely to be completed in June or July.
Lim said Salcon Engineering had no plans to diversify its operations as it wanted to focus on higher growth.
“We only hope to expand our business overseas and repeat our success story,” he said. – Bernama
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