Pantech plans expansion to improve profit

KUALA LUMPUR: Pipes and fittings maker Pantech Group Holdings Bhd expects its earnings to improve in its current financial year ending February 28 2011, led by expansion and better oil prices.

Pantech is investing RM250 million over five years to improve production of its carbon and stainless steel products.

It is investing more than RM100 million in its stainless steel plant in Johor.

The plant has an initial capacity of 7,000 tonnes per year and will produce stainless steel-welded pipes and fittings.

Pantech's executive director Adrian Tan said production at the plant will increase to 13,000 tonnes by the end of next year.

Pantech, in which Felda and Tabung Haji own 8.7 per cent and 5.9 per cent stake respectively, is also expanding its carbon steel plant in Meru in Klang, Selangor, for RM17 million.

"In line with the increasing demand for customised carbon steel products, especially long bends, we are expanding our capabilities to meet customers' orders.

"With the implementation of the Economic Transformation Programme, we expect more orders from the oil and gas and palm oil sectors," Tan said after the company's shareholders meeting here yesterday.

Pantech posted a net profit of RM28.98 million on the back of RM335.8 million revenue for its fiscal 2010.

The company supplies a full range of pipes, fittings and flow control products for the oil and gas sector and other industries such as energy, refinery, petrochemical and chemical, including palm oil and biodiesel.

Tan said Pantech has orders in hand valued at about RM100 million at any one time. It has bid for new jobs worth in the region of RM300 million to keep the orders going.

"We are dealing with several oil and gas players such as Petronas, Shell and ExxonMobil for jobs. During a crisis, there are more jobs in oil and gas," Tan said.