Sanichi ties up with FIRC

  • Business
  • Thursday, 08 Dec 2011

KUALA LUMPUR: Precision mould fabricator Sanichi Technology Bhd is forming an alliance with FIRC Trade (M) Sdn Bhd to venture into the business of mining and supplying minerals.

“We have not finalised on the business model but it is a 50:50 profit-sharing business venture,” group chairman and managing director Datuk Jacky Pang said in a briefing to announce the partnership. Also present were two representatives of FIRC Trade.

In a brief announcement, Pang said the joint venture was currently on “paper terms” and investment is yet to be decided. He added that the amount of investment in the joint venture would be decided upon its first business received from the partnership.

FIRC is involved in the mining industry as a contract owner and joint-venture partner with several iron ore producers and coal mines in Malaysia and Indonesia. It is also involved in the trading and supply of various iron ore and coal products. As at Dec 7, the issued and paid-up capital of FIRC stood at RM1mil consisting of one million ordinary shares of RM1 each.

FIRC Trade managing director Ahmad Faizul Mohamed Alwi said the company was previously based in Indonesia and was now relocating back in Kuala Lumpur due to this partnership. He said the company had an annual turnover of RM24mil after some questions were asked at the briefing.

Ahmad Faizul said FIRC Trade had five suppliers of steam coal in Indonesia but did not reveal any of them. However, he pointed out that the company currently supplied to the Guangxi power plant in China which consumed a minimum of 3 million tonnes of coal a year.

Concurrently, Sanichi said it had secured at least 3 million tonnes of coal supply a year from Indonesia’s CV Permata Al Zahra, in a separate filing with Bursa Malaysia. The contract will last two years beginning Dec 6.

“We intend to sell the steam coal secured from Indonesia to China. It is a huge market and there’s a big demand there,” Pang said, adding that the company had yet to secure any customers to take up its 3 million tonnes of steam coal.

He remained optimistic that it would received its first order in January next year. On average, he said, the gross margin for coal business was 10%.

Asked if Sanichi was diversifying into the energy business, Pang said it was just a new development or division within the company. “Unless this coal business is very profitable, we may consider diversifying into coal.”

“We expect this business to have a substantial contribution to the group in the financial ending 2012,” he added.

Going forward, Pang said the company might consider buying coal mining land in Indonesia. “It depends on customer orders. There’s no point in buying a coal mine if we don’t get any orders.”

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