BHIC to continue improving operational efficiency

The Star Online
Thursday, 6 April 2017

PETALING JAYA: Following its turnaround last year, Boustead Heavy Industries Corp Bhd (BHIC) will continue to improve its operational efficiency to enhance profitability, going forward.

The focus, its chairman Tan Sri Lodin Wok Kamaruddin said, was to strengthen its shipbuilding capabilities.

“Currently, our order book stands at RM7.5bil, inclusive of our associate company Boustead Naval Shipyard Sdn Bhd. We have made the effort to further improve our shipbuilding capabilities to cater to the requirement of the Royal Malaysian Navy (RMN).

“We are aware that the RMN wants to reduce its classes of ships to five from 15 and we have taken into consideration its new plan and strategy.

“We are also re-aligning our own operations to focus more on shipbuilding compared to maintenance, repair and overhaul works,” said Lodin after the company’s AGM yesterday.

The five classes are new generation patrol vessels (NGPV), littoral combat ships (LCS), submarines, littoral mission ships (LMS) and multi-support ships.

Managing director Tan Sri Ahmad Ramli Mohd Nor said the company had benefitted from its earlier projects that included six NGPVs that have been delivered, an ongoing LCS project and the most recent LMS contract that would see technology transfer from China.

“We are equipped with enough expertise to be confident enough to offer our own design and construction. Of course, we will work with other parties that are favoured by the Government.

“We will also continue to reduce our operational costs to offer competitive pricing to interested parties in the region

“Importantly, we also have a contract under the privatisation agreement with the Government to build 27 ships at Boustead Naval Shipyard.“So far, we have got orders for 12 ships that will keep us busy for some years,” he said.

On March 23, Boustead Naval Shipyard inked an RM1.17bil contract from the Government to build four units of LMS for the RMN. BHIC will team up with a partner shipyard in China to supply the ships.

Boustead Naval Shipyard is a company specialising in defence shipbuilding and ship repair and maintenance activities. It was reported that the first two ships will be built and delivered in China in 2019 and 2020, respectively, while the remaining two will be built at Boustead Naval Shipyard in Lumut, Perak, and will be delivered in 2021.

In 2016, BHIC returned to the black with earnings of RM76.69mil compared with a net loss of RM30.74mil in 2015, while its revenue increased 15.7% to RM307.52mil from RM265.64mil.

The company also declared an interim single-tier dividend of three sen per share for the financial year ending Dec 31, 2017, which was paid on March 30.

The focus, its chairman Tan Sri Lodin Wok Kamaruddin said, was to strengthen its shipbuilding capabilities.

BY SHARIDAN M. ALI