Gadang bids for RM2b govt jobs

KUALA LUMPUR: Gadang Holdings Bhd is stepping up its construction ventures, having put in over RM2 billion in tenders for mostly government projects.

Gadang managing director and CEO Tan Sri Kok Onn said the company hoped to secure at least 20% in value of the projects it had tendered for.

The projects it is eyeing include part of the Selangor-Pahang water transfer project and the proposed RM1 billion 300MW gas-fired power plant in Kimanis, Sabah.

Speaking to reporters after the AGM here on Thursday, Aug 12, Kok said while the construction division would remain its core unit, with about RM500 million in its order book, the company would also focus on its plantation and property divisions.

Gadang has secured a contract for part of the new low-cost carrier terminal (LCCT) at the Kuala Lumpur International Airport valued at RM292 million and the new Cheras Rehabilitation Hospital project estimated at RM342 million.

Kok is also upbeat about private financing initiative (PFI) projects under the 10th Malaysia Plan. "We have already submitted a few PFI projects at the invitation of the government," he said, adding the construction division contributed 50%-55% to group revenue.

On its property division, Kok said Gadang would be launching projects valued at about RM200 million over the next one year. Gadang's property projects are in Salak South in Kuala Lumpur and Tampoi, Johor.

"The property division is expected to contribute 25%-30% to the revenue. Our landbank is mostly in the Klang Valley and we are looking for more land," said Kok, adding its property project on 20 acres (8ha) in Tampoi would be launched by mid-October.

Gadang has an oil palm plantation in Ranau, Sabah where it has teamed up with the landowners for the cultivation of 5,000 acres of land.

"We will look for more land for joint venture in the same area," said Kok, adding the plantation division was expected to start contributing 5%-10% to group income by 2013.

On its proposed joint venture with Long An Province People's Committee, Vietnam, to undertake a waterworks project with 300,000 cubic metres daily capacity there, he said it was still at a feasibility stage.

Its subsidiary Green Water Investment had signed an MoU with Long An People's Committee in November 2008 for the proposed project. However, there was a delay due to the change in the local government there, he said.

For the financial year ended May 31, 2010, Gadang's net profit surged to RM15.06 million, or 12.8 sen per share, from RM3.03 million, on the back of RM260.9 million revenue. Net assets per share stood at RM1.57.  

The company had attributed the better performance to improved gross profit margins by the construction division and cost management initiatives implemented.

The stock rose two sen to 95 sen on Thursday on volume of 370,600 shares.