Zelan pursuing local mega infrastructure projects

KUALA LUMPUR: Zelan Bhd is pursuing a few mega infrastructure projects in the country as the company seeks to reduce its overdependence on overseas contracts where it was adversely impacted by the surge in material prices.

Its chairman Datuk Anwar Aji said on Aug 19 the company would work out the strategies to have a balance between overseas and local projects and the plan was expected to be presented to tbe board at the next meeting in October.

Overseas projects now account for more than 90% of its revenue, he said, adding Zelan could not be too exposed to its current overseas projects and it had to also rely on domestic projects which had positively contributed to its earnings previously.

"Most of the overseas projects were secured when building material prices were still low. Then, when we executed the projects, we experienced the very high increase of materials. We suffered losses because of that," Anwar told a press conference after the AGM.

Despite the challenging environment for overseas contracts, he said Zelan would still pursue such projects as it had recently received enquiries from the power plant and construction sectors.

As for local projects, Anwar said Zelan was pursuing a few mega infrastructure projects where it had issued letters of interest to the parties concerned, adding the next move is pre-qualification.

Anwar also said the current order book of RM1.8 billion comprising mainly of construction of overseas power plants, would be until the fourth quarter of 2010.

"We have to work hard to secure new projects otherwise we will be out of business. We are not talking about turning around the company, all of them will be out of job,"  he added.

For the year ended March 31, 2009, Zelan had a net loss of RM137.22 million on a revenue of RM2.0 billion. However, it managed to turn around in the first quarter ended June 30, 2009 with a net profit of RM4.30 million on the back of RM378.26 million in revenue.