Benalec earmarks RM60m for capex

by **hlk** Tue 05 Jul 2011, 08:13

PETALING JAYA: Benalec Holdings Bhd, a marine construction company specialising in land reclamation works, has set aside a capital expenditure of up to RM60 million for its financial year ending June 30 2012 to fuel its expansion.

The capex, which will be funded via a mixture of internally-generated funds and bank borrowings, will mainly be used to buy new vessels and undertake new jobs.

The company, which does most of its land reclamation jobs in Malacca, is hopeful of venturing “We see ourselves with the potential of tapping into the maritime industry in several states,” group managing director Vincent Leaw told Business Times recently.

“Our targets or land reclamation are Penang and Johor. Overall, we are looking forward to an exciting (financial) year ahead,” he added.

Leaw said that he sees the company tapping into the maritime
industry, as well as property development in the new target markets.

Although he did not disclose, it is believed that the company is in advance talks with potential partners on possible expansion into new markets.

The company posted a net profit of RM73.27 million for the nine months ended March 31 2011, while revenue was at RM148.53 million.

Moving forward, the company remains optimistic on its outlook, mainly helped by the improving economy and market sentiment.

The company’s earnings are driven by two main sources — payment in cash and payment in kind by customers.

“For example, if we reclaim a land of 1,000 acres and the customer wants to pay us in kind, we would take a percentage of the land, which is equivalent to the cost of the project. Usually, it is 50-60 per cent of the land reclaimed,” Leaw said.

Moreover, Benalec also has the expertise to incorporate unique design elements on the reclaimed land. For example, in one of its project in Malacca, it plans to design a shape that has the element of “One Malaysia”.

Its efforts of adding the “design element” into its reclamation works have shown results. For instance, the value of one of the reclaimed land it “designed” is now fetching at least 20 per cent more than the average land price within its vicinity.

“That’s what makes us unique. This capability allows us to go and initiate projects, and we don’t have to wait for projects to come to us,” Leaw added.