PSP Energy Bhd group managing director Ong Chee Seng
PETALING JAYA: ACE Market-bound PSP Energy Bhd
believes rising economic activity in Malaysia will continue supporting demand for conventional fuels – including bunkering services for the shipping industry – even as the global energy landscape shifts toward renewables.
Managing director Ong Chee Seng told StarBiz that while renewable energy is gaining traction, conventional fuels remain central to Malaysia’s power supply and industrial needs.
“Our view is that, while renewable energy has been gaining traction over time, conventional fuel products are still the largest sources of power supply in Malaysia,” he said.
The fuel and lubricant products trading and distribution group sells fuel products such as diesel, fuel oil and marine gas oil, which remained essential in industrial sectors such as shipping, logistics, manufacturing, construction and power plants.
“Growing economic activities over time will certainly raise the demand for our fuel products on the principle that fuel is a basic commodity product needed to generate power to support these key industrial activities,” he added.
According to independent market research Providence Strategic Partners Sdn Bhd, the wholesale market for fuel products in Malaysia is projected to grow at an average annual rate of 2.6% over the next two years.
“This signifies the continuing positive market outlook in the industry where we primarily operate in,” Ong noted.
PSP Energy currently operates two diesel storage plants in Telok Gong, Port Klang, with capacities of 1.5 megalitres and 0.3 megalitres, a fleet of 42 road tankers with total carrying capacity of approximately 1.3 megalitres of fuel products, and three bunker vessels with a total cargo-carrying capacity of 2.4 megalitres.
The vessels supply marine gas oil and other fuels directly to ships docked at port, and the group is licensed to provide bunkering services for 26 ports in Peninsular Malaysia.
PSP Energy, which is scheduled to list on Dec 4, will raise RM34.2mil from the public issuance of 213.8 million new shares, representing 20% of its enlarged share capital.
From the funds raised, RM15mil will be used for the purchase of a new bunker vessel.
Ong said the new vessel is expected to have a gross carrying capacity of 2.0 megalitres, almost doubling its cargo-carrying capacity to 4.4 megalitres.
“Upon commercialisation, this will give a significant boost to the scale of our bunkering capacity and also, enabling us to take on larger offshore re-fueling volume,” he said.
He added that the group is also working to set up a new bunkering service hub at the Tanjung Bruas Port in Melaka, scheduled to be operational by the second half of 2026, or earlier.
“When operationalised, we can have a total of 4 bunker vessels touring between Port Klang and Melaka to serve bunker re-fueling needs of vessels docked at these two locations.”
Most importantly, Ong said the Tanjung Bruas Port already has three large silo tanks with a total combined fuel products storage capacity of six megalitres, giving the group a shorter time to market.
For context, this storage capacity is larger than the existing storage plant in Telok Gong, Port Klang, which totals 1.5 megalitres.
A further RM12mil, equivalent to 35.1% of the proceeds, will be used to purchase fuel products as it grows its distribution and lubricants business.
Ong said over the next 12 months, the group also intends to set up a branch office and warehouse in Pahang to target lubricant product demand on the east coast.
“For illustrative purposes, based on the average market prices of diesel and marine gas oil of approximately RM2.55 per litre, the allocated proceeds will enable us to purchase up to 4.7 megalitres of diesel and/or marine gas oil.”
PSP Energy sells third-party lubricant products from two major suppliers – Supplier A, a public-listed company on Bursa Malaysia, and TotalEnergies – while also offering its own brand, ‘PSP Lubricants’.
While acknowledging that the lubricant products market is competitive, Ong said the group stands out by offering a mix of own-brand and third-party products.
He added that PSP’s own brands are relatively cheaper compared with third-party products.
“Given that we carry a mix of our own brands and third party brands of lubricant products, we are able to offer more choices to our customers to select their preferred one. To the best of our knowledge, not many lubricant products sellers have a mix of brands for sales to customers.
“Hence, we are nimble to target a wide range of customers.”
To support its expansion plans, PSP Energy will also spend RM1mil, or 2.9% of the funds raised, to acquire seven new road tankers, bringing its fleet to a total of 49 tankers.
Another RM1.31mil, or 3.8% of the proceeds, will be used for general working capital, while RM4.9mil, or 14.3%, is allocated for listing expenses.
Based on its initial public offering price of 16 sen, PSP Energy’s valuation works out to a price-earnings multiple of about 12 times, benchmarked against its net profit of RM14.3mil for the financial year ended June 30, 2025.
At 16 sen a share, the group is expected to debut with a market capitalisation of RM171mil.
