PJI looks to China for more revenue

  • Business
  • Saturday, 10 May 2003

PJI Holdings Bhd expects its revenue to grow by more than 10% from the year to June 2004 as contributions from its water treatment project in China and potential new operations come on stream, chief executive officer and managing director Lee Peng Joo said. 

PJI, mainly a mechanical and electrical engineering firm, had tendered for some RM800mil worth of projects locally, while it was bidding for overseas contracts valued at RM200mil, Lee said in an interview. 

Earnings from PJI’s overseas business were negligible at this point but they should contribute at least 20% of its pre-tax profit by 2004 or 2005, he added. 

Lee Peng Joo

Lee said PJI invested RM900,000 for a 30% stake in a water treatment plant in Xiamen, southern China, as part of a joint venture with listed construction firm and property developer, DKLS Industries Bhd

PJI expects the Xiamen project to generate about RM1mil in pre-tax profit as a maiden contribution to the PJI group’s year to June results, with the contribution seen rising significantly after that. 

In the longer term, sales and pre-tax profit should grow at 20% annually over the next five to 10 years in line with a growing customer base. 

PJI was also looking to invest in another two water projects in southern China, with investment at five to 10 times the size of its Xiamen project, he said. 

“(The Xiamen water project) is working out well so far and we are now looking for the second and third one. 

“We are still in the final stage of negotiations and we are optimistic. With the experience from our first deal, we hope to conclude the deal with the China government,” Lee said. 

Outside southern China, PJI is also exploring a large water concession project that will require investment of over RM100mil and it plans to team up with an experienced Malaysian partner that has a proven track record in China. 

The potential partner is a KLSE-listed company, Lee said, but he declined to elaborate. 

On PJI’s core mechanical and electrical engineering operations, Lee said the company was now exploring opportunities in the United Arab Emirates, Bahrain and Qatar, with good prospects seen in Qatar as the latter's capital Doha would host the Asian Games in 2006. 

The company was also looking at Bangladesh, Vietnam and some African states, he said, adding that it expected overseas jobs to generate profit margins that were higher than the 10% registered from local projects. 

PJI has been shortlisted for two infrastructure projects in the Middle East but Lee declined to reveal further details except to say that the company hoped to clinch RM100mil worth of contracts out of the RM200mil tendered. 

PJI will be transferred to the KLSE main board on Monday. – AFX  

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