Dataprep plans partnerships

  • Business
  • Monday, 21 May 2012

PETALING JAYA: Information and communications technology (ICT) services provider, Dataprep Holdings Bhd is likely to announce its partnership with several strategic partners soon to grow its business as part of its plan to turnaround the company.

“We are looking to partner three to four companies. It is almost final. We will make the announcement in the next few weeks,” chief executive officer Ahmad Rizan Ibrahim said.

Without disclosing details, he said Dataprep's partners were not only information and communications technology (ICT) companies but also manufacturers and would be complementing each other.

Rizan, which took over the helm of Dataprep last June, pointed out that forming new partnerships were part of its strategy to return to profitability.

Other strategies included moving away from its low-margin businesses, building greater recurring income, going into new industries, being less dependent on government projects and venturing overseas.

It also intends to change the company's revenue mix between the government and the private sector to 50:50 from the current 60:40.

Dataprep has been making losses for the past few financial years.

For the nine months to Dec 31, 2011, the company posted a net loss of RM2.9mil on revenue of RM53.1mil.

“Things are looking positive and it's improving. We have put in a lot of plans trying to get overseas jobs. We hope to break-even this year,” Rizan added.

“It is possible to turn around and it will take a lot of effort to push it through.”

Previous reports said that Dataprep was expected to return to the black in the current financial year ending March 31, 2013.

ICT, Rizan noted, was a very competitive industry and margins were eroding. The group is making moves to shift its focus to higher-margin businesses.

“We would be lucky to get 3% to 5% margins for hardware sales. Clients will negotiate with us for the best deal they could get. We don't get much margin from trading hardware and we are moving away from that,” he said.

A range of 15% to 20% was considered a good margin. To capture such margins, Dataprep is moving into new industries such as transportation, tourism and real estate.

Separately, it is also looking at securing contracts in Indochina to tap on the vast ICT potential in Cambodia, Vietnam and Laos.

It is also looking at Indonesia. Overseas contribution to the group's revenue at the moment is minuscule, only about 1%.

“We are still at the exploring stage. These countries are currently ramping up their ICT and Indonesia is a large market,” Rizan said.

However, he said there were several challenges in Indochina such as language barrier, knowledge and resources as well as certain restrictions for businesses.

“We're still exploring and we're very careful,” he added.

Dataprep's direct competitors include Heitech Padu Bhd, Mesiniaga Bhd and Strateq (previously Kompakar).

Currently, Dataprep has a backlog order worth RM35mil out of which RM23mil are recurring income. Its orderbook will last the company for more than a year. Its most notable contract is being appointed as the main ICT and Project Delivery Partner for the Secret Garden Resorts Project in the city of Chong Li, Province of Hebei, China.

With an estimated gross development value of US$6bil, Secret Garden Resorts, which is located 250km west of Beijing, aims to be a world-class integrated ski resort development covering an area of 100 sq km. It will be built over several years.

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