PENANG: Wah Seong Corp Bhd is investing between RM300mil and RM350mil this year to venture into deepwater pipe coating and expand its gas compressing business.
Group chief executive officer Chan Cheu Leong said that RM80mil would go towards building Asias first deepwater pipe-coating plant in Kuantan, Pahang.
The state-of-the-art facility will be located near our existing pipe-coating plant. Construction will begin soon for completion in 2008, he said after the firm's AGM yesterday.
Chan said the decision to build the plant followed an extensive study of the surging global demand for deepwater pipe coating.
He said that in Malaysia alone, nine deepwater oil and gas (O&G) fields had been identified for commercial operations from this year to 2013.
There are also 10 new open deepwater blocks in the country, offering a good potential for deepwater pipe-coating activities.
Our venture into deepwater pipe coating is timely, given that many deepwater O&G fields and projects are set to come onstream in the near future, both locally and globally, Chan said.
The move also allows us to play an extended role in the pipe-coating business, which is one of the groups biggest revenue earners,'' he added.
Chan said the balance investment would be for expanding the capacity of its gas compressing operations.
He said the groups industrial services division, comprising agro-based engineering, infrastructure and building materials units, was forecast to perform well this year.
At the AGM, shareholders approved the proposed final dividend of 7% for the financial year ended Dec 31, 2006. The dividend is payable next month.