KUCHING: TAS Offshore Bhd
is currently in negotiations to build 27 tugboats for its existing Indonesian clients.
The tugboats are valued at about RM150mil and if the deals are struck, the group’s order book will grow tremendously, said managing director Datuk Lau Nai Hoh.
“At this juncture, the negotiations with a few existing Indonesian customers are still ongoing,” he told StarBiz, without saying when the negotiations are expected to be finalised.
Lau said that last year, TAS’ wholly-owned subsidiary Tuong Aik Shipyard Sdn Bhd secured 13 shipbuilding contracts, mainly for tugboats that were worth RM70mil, from clients in Indonesia and Singapore.
“Currently, our order book stands at RM93.7mil, which will carry out through the financial years 2023 and 2024 and contribute positively to the group’s financial position,” he added.
Last year, TAS completed and delivered seven tugboats valued at RM52.5mil for customers in Indonesia and Iraq.
Lau said Russia’s invasion of Ukraine in 2022 had led to a global energy crisis, driving coal and oil prices to their highest levels in nearly a decade.
Amid the rising demand and surging prices, he said the Indonesian coal industry has been expanding rapidly and this has spurred the demand for more tugboats required to transport the commodity.
A Fitch Rating report said tight coal supply due to the wet season in Australia (one of the countries having the biggest coal reserves in the world), strong demand from India and the energy crisis in Europe have propelled coal prices globally in 2022.
Amid the rising coal prices, Indonesian coal miners are racing to boost their production.
According to the Indonesian Coal Mining Association, the government had given approval to increase coal production amid surging demand on persistent supply disruptions by the war in eastern Europe.
Based on the Mordor Intelligence report, the Indonesian coal market is expected to witness a compounded annual growth rate of 5.3% during the forecast period of 2022-2027.
In addition, Lau said the growth in Indonesia’s nickel and bauxite demand also augur well for TAS as tugboats are essential for inter-island transportation of bulk materials in Indonesia.
The group foresees the demand for tugboats to be sustainable.
In the second quarter to Nov 30, 2022, TAS’ revenue almost doubled to RM9.6mil from RM4.9mil a year ago and the group managed to reduce its net loss to RM339,000 from RM797,000 previously.
The expanded revenue benefited from the delivery of new-built vessels.
On Jan 11, 2023, TAS made a series of new appointments to its board of directors following the retirement of directors Tan Sri Mohd Jamil, David Lau Kiing Yiing and Ling Ka Chuan.
The group appointed its first female director – Datin Patinggi Jamilah Anu (wife of the late Sarawak Chief Minister Datuk Patinggi Adenan Satem).
Also appointed as new directors were James Yong Leh Ying, Raymond Lau Choo Kuang and Anthony Ling Hang Ngee.
