KUALA LUMPUR: Boustead Heavy Industries Corp Bhd (BHIC) signed a joint-venture deal with Prokhas Managers Sdn Bhd (PMSB) yesterday to supply artillery propellants to the Malaysian Armed Forces.
Under the joint venture, a new company, namely Pyrotechnical Ordnance Malaysia Sdn Bhd, will produce double base artillery propellants at a plant located on a 21-acre site in Bentong, Pahang.
The plant is due to begin production in the third quarter of next year.
“So far, we have invested RM58mil in the plant,” said BHIC managing director Tan Sri Ahmad Ramli Mohd Nor.
PMSB and BHIC subsidiary Boustead Defence Technologies Sdn Bhd have a 51% and 49% stake respectively in Pyrotechnical Ordnance.
PMSB is a unit of Minister of Finance Inc.
Pyrotechnical Ordnance has an authorised share capital of RM50mil.
Under the joint-venture agreement, Pyrotechnical Ordnance will have a paid-up capital of RM35.3mil.
“This joint venture is another step towards self-reliance in defence production,” said Defence Minister Datuk Seri Dr Ahmad Zahid Hamidi who witnessed the signing of the joint-venture deal in Kuala Lumpur yesterday.
According to Ahmad Zahid, the impending production of artillery propellants is the result of research and development by a company in Slovakia and the Science and Technology Research Institute for Defence (Stride).
Stride director-general Datuk Dr Abdul Ghaffar Ramli said the Malaysian military presently imported propellants which had a limited lifespan.
“Also, there is inconsistency in the quality of the propellants.”
BHIC's Ahmad Ramli said the joint venture would ensure consistency in the quality and supply of the propellants, which might be marketed to other Asean countries in future.
“The plant's production capacity will be sufficient to address the needs of the Malaysian Armed Forces,” said Ahmad Ramli.