PUTRAJAYA: TH Heavy Engineering Bhd, an associate company of Lembaga Tabung Haji (LTH), and McDermott International, Inc of the United States, have formalised a joint venture to provide a broad spectrum of marine construction services, including full engineering, procurement, construction, installation and commissioning solutions, to the Malaysian and Asia-Pacific offshore oil and gas (O&G) industry.
The agreement would see a 30% share swap between Berlian McDermott Sdn Bhd, the local arm of McDermott International, and TH Fabricators Sdn Bhd, in a deal worth US$25.4mil (RM77.7mil).
It also includes the formation of two local companies offering engineering, procurement and project management services, in which McDermott and TH Heavy Engineering will have equal ownership.
Minister in the Prime Minister's Department Datuk Seri Jamil Khir Baharom, who witnessed the signing, said the co-operation was hoped to bring better returns for the 7.9 million Tabung Haji depositors.
TH Heavy Engineering chairman Datuk Azizan Abd Rahman said the JV was seen as a perfect fit because it was traditionally mainly involved in the fabrication of offshore steel structures and other related offshore O&G engineering services in Malaysia, while Berlian McDermott had been a pioneer in transportation and installation for more than 30 years.
“When both entities are brought together, TH Heavy Engineering would be able to position itself as a complete engineering, procurement, construction and installation company, able to offer end-to-end services, thus enabling us to compete more comprehensively and effectively locally as well as regionally,” he said.
At the press conference later, Azizan said the JV agreement, however, was subject to TH Heavy Engineering shareholders' approval, which is targeted to be in early February next year.
McDermott International chairman, president and chief executive officer Stephen M. Johnson said the union provided opportunities for the two companies that neither would have on their own.
“This allows us to undertake larger, more complex projects and bring them to the oil and gas industry, our customers, in a way we have not been able to do before. Therefore, it is a perfectly designed JV,” he said.
TH Heavy Engineering managing director and CEO Nor Badli Mohd Alias said the co-operation would create a wider reach for the company, with market potential quadrupling.
He said the company's existing order book amounted to RM200mil, where the jobs were mostly Malaysia-based, while the tender pipeline was valued at around RM1.2bil to RM1.4bil. - Bernama
“There is a lot of work coming out of Malaysia and some of these jobs are getting more and more complex, and on our own, we may not be able to qualify. So certainly, this JV would enable us to qualify and meet those tender requirements,” he added. - Bernama