Published: Friday April 4, 2014 MYT 12:00:00 AM
Updated: Friday April 4, 2014 MYT 7:27:55 AM
KUALA LUMPUR: Boustead Heavy Industries Corp Bhd (BHIC) expects to build the first littoral combat ship (LCS) early next year, under a RM9bil contract awarded to its associate company.This, coupled with the group’s growing maintenance, repair and overhaul (MRO) business, will help the company improve its financial performance in the current financial year ending Dec 31, 2014.
“We are confident of doing much better this year. BHIC’s order book for shipbuilding and MRO for this year is more than RM500mil,” managing director Tan Sri Ahmad Ramli Mohd Nor told reporters after the company’s AGM yesterday.
He said the LCS programme was ahead of schedule and that actual work at the group’s shipyard in Lumut, Perak was expected to commence once the LCS project contract was finalised.
“We are already more or less at 35%. A lot of pre-planning is being done,” he said. Project revisions and cost overuns related to the LCS project hit the group last year as its associate company Boustead Naval Shipyard Sdn Bhd reported loss of RM23.2mil in the financial year of 2013.
Ahmad Ramli said the revisions took into consideration the negotiated scope of work with various stakeholders, including the navy and original equipment manufacturers (OEMs). He added that 80% of contracts with the OEMs was already in place.
The building of the ships required a lot of imported high-end equipment, something which the company was wary about, he said, adding that the projected cost could vary with the value of the ringgit fluctuating against major currencies.
“We purchased a lot of equipment from overseas. So the movements of the ringgit do have a big impact on our shipbuilding business. But the project is on track and will start in the first quarter of next year,” chairman Tan Sri Lodin Wok Kamaruddin said.
According to The Edge Financial Daily on this matter, 35% of the project has already been completed as follows ;
On the RM9 billion littoral combat ship contract from the Defence Ministry, Ahmad Ramli said Boustead Naval Shipyard Sdn Bhd, an associate of BHIC, has progressed around 35% of the project, mostly on the aspects of the design work, training of manpower and improvement of infrastructure.
“The actual work itself will start in Lumut in the first quarter of next year,” he added.