PETALING JAYA: After a challenging 2014, Boustead Heavy Industries Corp Bhd (BHIC) is looking forward to a “much brighter future” and will continue to make its shipbuilding activities for the Royal Malaysian Navy its top priority, according to chairman Tan Sri Lodin Wok Kamaruddin.
He said the volatility of the global and Malaysian economies last year, as well as the plunging prices of crude oil and depreciating ringgit, had played a role in affecting its operations.
However, he said the positive side was its RM9bil contract last July to build six littoral combat ships under its associate company Boustead Naval Shipyard Sdn Bhd, with the first of these ships to be delivered in 2019.
Lodin said that BHIC was actively pursuing other business activities and had undertaken many maintenance, repair and overhaul projects and ship service life extension programmes.
“All in all, we are looking forward to a much brighter future over the next several years. Our focus will be on giving the best service and quality to the Navy, then we can make sure our shores will be well-protected,” he told reporters after BHIC’s AGM yesterday.
Lodin said that its military and commercial divisions contributed 80% and 20%, respectively, towards its earnings, adding that BHIC would aim to achieve a 70% and 30% contribution percentage over the next five years.
Executive deputy chairman and managing director Tan Sri Ahmad Ramli Mohd Nor said BHIC had made substantial progress in its performance, mainly due to its transformation programme and stringent cost controls.
“Looking forward, we are quite confident about learning from the hurdles we had endured during the 2008 crisis. We had a very bitter and costly experience, but are coming out much smarter,” he said, adding that BHIC would now only work on niche commercial projects that will allow it to control costs and had minimal risk.
Ahmad Ramli said that BHIC currently had an orderbook of RM1bil, but a combined orderbook of RM10bil under Boustead Holdings Bhd .
He said that it was in efforts to secure various other projects and expressed confidence that it would be able to add “quite a substantial amount” to its orderbook this year.
He said that BHIC was also working on the first locally designed offshore support vessel (OSV) after it was tasked by the Government to improve the industry’s design and engineering efforts, adding that it had consulted Petroliam Nasional Bhd (Petronas) on how to optimise the performance and design.
“We will tell clients that it is a Petronas-sanctioned design and we will have to market it,” he said.