Seacera to bid for Warisan Merdeka

  • Business
  • Saturday, 13 Dec 2014

Zulkarnin at the company’s tile warehouse

Seacera Group Bhd will be submitting its tender for the multi-billion ringgit Menara Warisan Merdeka project in the next few weeks.

The company, which is predominantly a ceramic tile maker, is one of the handful of pre-qualified firms which will bid for the construction of the 118-storey building, which is supposed to be the country’s tallest building when it is completed in 2019.

“We will submit the tender before year-end and are expecting the results to be out within the next six months. We think each consortium has an equal chance of getting it,” says group managing director Zulkarnin Ariffin.

The full list of the other pre-qualified firms is not immediately available.

Smallish Seacera is partnering China giants Sinohydro Corp Ltd and Shanghai Construction Group Co Ltd to submit a bid for the project, which is said to have an overall cost of up to RM3bil.

The bumiputra company’s interest is via its construction outfit SPAZ Sdn Bhd in which it bought a 60% stake earlier this year.

Seacera holds 40% in the tripartite partnership with the Chinese firms where the parties will be responsible for building the tower’s structure, if they get the gargantuan job.

Under the radar

The firm, which had been under the radar for the longest time, saw its stock surge to a high of RM1.37 in August, its highest in at least a decade after it said it was pre-qualified to help construct the Warisan Merdeka tower which will be built within the vicinity of Stadium Merdeka.

That price, which was an extension of an earlier uptrend could also be explained by Seacera’s proposal to dispose of its polyfilm business, Seacera Polyfilms, to Scientex Bhd for RM40mil cash which was announced a few months earlier.

That transaction has been completed.

Excitement on the stock, however, has since dissipated as evident by Seacera’s last traded price of 74 sen.

Notably, there has been a delay in the award of the main contracts for the Warisan Merdeka project which was supposed to be completed this month.

Last month, Permodalan Nasional Bhd (PNB), whose unit is the developer of the mega development, was reported to have said that it was extending that deadline to the second quarter of next year as it wants to “select the best companies which have excellent track record and experience in huge construction” jobs.

Despite the current lack of euphoria on the stock, Zulkarnin, who is the company’s single largest shareholder with a 22.6% stake, says the firm, first listed on Bursa Malaysia in 1999, is in for an “exciting” 2015.

“We have things happening in all of our three segments.”

Seacera’s businesses can be categorised into the manufacture of ceramic tiles and other building materials, construction and property. Currently, earnings – which stood at RM13mil for the nine months to Sept 30 – come primarily from the first segment but the full impact of construction earnings should be felt by the end of the financial year ending Dec 31, 2015, Zulkarnin says.

Its property business, where the group has land including a massive 500-acre tract in Ulu Langat, Selangor – has yet to contribute any profits.

There has been a significant delay in its property segment as two years back, Zulkarnin had said that the group was getting ready to kickstart development on its Ulu Langat land.

Nothing has so far materialised.

“We are still in discussions and think that we can get better offers (from developers),” he says of this, unfazed about the general concerns of a slowdown in the property market.

StarBiz reported in 2012 that Seacera could possibly join forces with Naza TTDI Sdn Bhd, the property arm of the Naza group, to develop the first 50 acres of its Ulu Langat land.

Zulkarnin is coy about this, not denying nor confirming anything.

Of the 500 acres, Seacera owns 113 acres, which it bought from landowner Duta Skyline Sdn Bhd for about RM27mil or RM5.50 per sq ft. The remaining land is currently owned on a 78:22 joint-venture basis with Duta Skyline, with the larger portion owned by Seacera.

Seacera has the right of first refusal (which basically means the right to buy something before the offer is made to other parties) to buy the remaining land it currently co-owns with Duta Skyline.

Meanwhile, expansion plans for the company’s bread-and-butter ceramic tiles segment include a new plant in Kamunting, Perak which when fully completed will boost production by four times from its current 2 million sq m per year, Zulkarnin says.

The first phase is expected to be commissioned by the first quarter of next year.

Electric fence details still scant

For its construction segment, its current order book is about RM300mil comprising mainly of local jobs.

While awaiting the outcome of the Warisan Merdeka tender, Seacera is also hopeful that its proposal to the Government to build a 506 km first-ever electrified fence over the Malaysian-Thai border will see some light by next year.

This proposal has drawn a slew of criticism since the company first announced it in June as Seacera does not have any track record in this area.

Certain quarters are left scratching their heads asking if this proposal is an unsolicited bid or whether the Government is actually thinking of plugging the leaks at its borders.

Additionally, when the company first made the announcement, details such as the proposed cost were not revealed.

Zulkarnin is still unable to provide any further details, only saying that its partner for this proposed job, little-known Intelligent Fence (M) Sdn Bhd has the expertise and technology which it derives from South Africa.

A search with the Registrar of Companies shows that the main shareholder of Intelligent Fence is 35-year-old Chandrasegaran Uthamasselan.

If the Government agrees to this project, Zulkarnin believes that an open tender will be called.

Notably, in its announcement to the stock exchange in June, Seacera said it planned to participate in a “tender under public-private partnership with the Home Ministry to build, operate and transfer an electric security fence along the national border of Malaysia and Thailand”.

“By next year, a lot more things will be firmed up for us and investors will have a clearer picture of Seacera.”

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Business , seacera , warisan merdeka


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