KUALA LUMPUR: Boustead Heavy Industries Corp Bhd (BHIC) is actively seeking a renewal of its contract to build patrol vessels for the Royal Malaysian Navy (RMN).

BHIC associate Boustead Naval Shipyard Sdn Bhd, in which the company has a 20.77% stake, has almost completed the first batch of six offshore patrol vessels (OPVs) from an original contract signed with the Government for 27 OPVs back in 1998.

BHIC, including its associate, has an order book of RM2.2bil to-date, with defence contracts making up 70% of its total orders.

BHIC executive deputy chairman-cum-managing director Vice-Admiral Tan Sri Ahmad Ramli Mohd Nor told reporters after the company’s AGM that the signs were quite positive that the Government would renew the contract.

He said the company was actively pursuing the renewal and that the number of vessels proposed to be built would be enough for it to invest in new technology.

However, Ahmad Ramli could not give more details on when the Government would make an announcement on the contract but hinted that it wanted the next batch of OPVs to be more technologically advanced.

According to previous reports, the Government was supposed to make an announcement on the renewal of the contract, worth up to RM7bil for the next batch of six OPVs, during the Langkawi International Maritime and Aerospace exhibition in December last year.

Ahmad Ramli said should the contract be renewed, it would likely spread over the 10th and 11th Malaysia Plans period and involve a higher local content compared with the previous batch.

On whether the Government could afford to expand the RMN’s assets at a time when its coffers were feeling the pressure following its RM67bil worth of measures to boost the economy, he said the higher local content could be seen as part of the stimulus since the jobs would be given to local defence industry.

Ahmad Ramli said this would in turn encourage vendors to move up the value chain. “We’re also making a lot of efforts in diversifying, especially in our technology.”

He said BHIC was still pursuing its plans to expand in commercial shipbuilding. “We’re targeting half of the revenue to come from commercial shipbuilding but the economic recession derailed the plans.”

Source: The Star

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