Scomi eyes projects worth RM1b to venture into renewable energy

There’s a strong potential in RE sector, especially in hydro and solar energy, says CFO

By KEVIN WONG / Pic By MUHD AMIN NAHARUL

Scomi Group Bhd aims to secure an estimated RM1 billion worth of projects from its new ventures into the renewable energy (RE) sector by the end of its next financial year ending March 31, 2019.

CFO Mukhnizam Mahmud (on the left)  said there is a strong potential growth in the RE sector, as well as an increasing number of projects, especially in hydro and solar energy.

“We are doing this partly because we see there has been no increased activity in our oilfield services business segment, despite the recent recovery in crude oil prices.

“At the same time, we are confident that the RE sector is the growth industry for us, primarily in the hydro and solar energy distribution,” he told reporters after the company’s EGM yesterday.

He added that Scomi is in the middle of bidding for several projects and in talks with potential partners.

“Most of the initial projects that we are bidding for will be local. However, we are also eyeing the overseas markets such as Pakistan and Vietnam, which may present us some opportunities.”

Mukhnizam also said that Scomi was awarded a 30MW solar energy project in Kedah last year, where it holds a 30% equity ownership.

Additionally, he said Scomi’s focus in RE sector mirrors Tenaga Nasional Bhd’s objec- tive to strike a balance between renewable and conventional energy sources.

Earlier in the EGM, Scomi Group shareholders approved the company’s proposed merger between Scomi Energy Services Bhd and Scomi Engineering Bhd.

Mukhnizam said the merger is meant to consolidate three companies into a single listed entity, as it will be more efficient in terms of management and shall reduce duplication listing costs.

“Additionally, the merger will help us move forward where it will give us a bigger balance sheet and more strength to face future challenges,” he said.

In terms of staff layoffs, Scomi will mitigate the number of terminations, but the firm will not extend project- based contracts.

Nonetheless, Mukhnizam said Scomi will be redeploying employees, following its shift into new businesses such as the RE move.

Commenting on the oil and gas industry, he said the industry remains challenging.

“Despite the increased crude oil price, it does not necessarily correlate to a pickup of upstream activities, which is quite unfortunate. With that said, we are in the exploration business (upstream) and our business is not directly related to an increase of oil price,” he said.