Mar 09 2010 |
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Pantech to invest SR15 million in Dammam plant
KUALA LUMPUR - Pantech Group Holdings Bhd is venturing abroad to establish a SR15 million (RM13.45 million) carbon steel fittings plant in Dammam, reported the Bernama news agency.Executive Director Adrian Tan said the first phase of the plant is expected to be ready before the financil year ending Feb 28, 2011.
Pantech, a pipes, fittings and flow control manufacturer for the oil and gas industry, expects revenue of SR50 million (RM44.85 million) to be generated in the first year of the plant's operations in the oil-rich Gulf region.
Tan said this after the signing of a memorandum of understanding (MoU) and agency agreement between Pantech International (KSA) Sdn Bhd and Saudi-based Abdul Rahman Al-Otaishan Trading Group (Al-Otaishan Group) here Monday.
The signing ceremony was witnessed by Deputy Finance Minister I, Datuk Wira Chor Chee Heung.
The agreements will facilitate the establishment of a joint investment company, in which Pantech Group will own 49 per cent equity while Al-Otaishan Group will hold the remaining 51 percent.
Al-Otaishan will be the sole distributor and agent for Pantech's products in Saudi Arabia and non-exclusive distributor and agent in the other Gulf Cooperation Council (GCC) countries.
Established in 1982, the Al-Otaishan Group is a leading general contractor involved in the production of crude oil and numerous other downstream petrochemical industries in Dammam.
Tan said within three years, Pantech hoped its overseas operations would contribute about 40 per cent to group revenue, from 27 percent at present.
He added for the financial year ended Feb 28, 2009, the group hoped to maintain its profit level while a slight drop was expected in revenue given the slump in demand and high prices for steel products.
In line with its growth plan, Tan said the group hoped to commence operations of its new RM80 million stainless steel, alloy pipes and fittings plant in Pasir Gudang, Johore, by year-end.
Pantech Group currently manufactures butt-welded carbon steel fittings such as elbows, tees, reducers and long bends at its Klang plant, 80 per cent of which is exported to the United States, South America and the Middle East.
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