Gadang eyes more utilities projects

Friday November 17,2006, thestaronline

KUALA LUMPUR: Gadang Holdings Bhd aims to increase its investment in the utilities sector, said managing director and chief executive officer Datuk Kok Onn.

He said the company's foray into treated water supply concessions in Indonesia had enabled it to develop steady recurrent revenue.

“Only 20% of the Indonesian population has treated water supply, so we see huge potential to grow this business,” he told reporters after the company AGM yesterday.

Gadang has three treated water supply concessions in Indonesia at present. It acquired PT Taman Tirta Sidoarjo, which produces 200 litres of treated water per second, last year.

The other plants are PT Bintang Hytien Jaya (BHJ) in Kota Tangerang, which has a production capacity of 1,050 litres per second and PT Sarana Catur Tirtakelola (SCTK), which would supply 400 litres per second when the plant is completed early next year.

Gadang said the capital investment for BHJ and SCTK over the next five years was expected to be more than RM100mil while the annual revenue from the division was expected to climb from the present RM4mil to over RM50mil by 2010.

It is also in negotiations to acquire new concessions, which have a combined output capacity of 1,500 litres per second.

Kok said the company’s engineering division had an order book worth RM430mil, which was expected to last about a year.

“We foresee some new jobs coming in,” he said, adding that Gadang was optimistic of securing infrastructure and building projects under the Ninth Malaysia Plan and the Private Finance Initiative scheme.

The engineering division has tendered for local projects worth more than RM1bil and expects to secure some deals within the next few months.

Meanwhile, Gadang's property division has about 100 acres land bank worth over RM100mil. Around 80% of it is located in the Klang Valley and the balance in Johor.

The group is also now in talks with some parties in China for water and real estate projects.