PETALING JAYA: Aneka Jaringan Holdings Bhd, a construction company specialising in basement and foundation works, is expanding into Taiwan where it has begun its first projects this month.
CEO Tse Fui Pang said it is partnering with Continental Engineering Corporation (CEC) to build two metro rail transit (MRT) stations under a 12-month contract worth RM30 million.
“We are working with CEC in Taiwan to build two MRT stations. We have sent our equipment over from Kuala Lumpur and started work in October,“ he told SunBiz in a recent interview.
Tse said the company invested about RM3–5 million upfront mainly to mobilise equipment from Malaysia.
The Taiwan projects, he added, will adopt a labour-and-equipment-only structure which allows for higher profit margins.
“A RM30 million Taiwan project without materials would be roughly equivalent to a RM60 million project in Malaysia if materials were included,“ he revealed.
Tse noted that Taiwan has many upcoming data centre projects, signalling future business opportunities beyond MRT works. He expects most of the group’s work there will involve large-scale infrastructure such as MRT stations, data centres and other public or commercial facilities.
“In Malaysia, most work is in residential construction like housing developments, which are smaller and generally lower-margin.”
Tse said the group is eyeing Taiwan and Indonesia as its two main overseas growth markets, citing higher margins and ease of operations.
He said Taiwan would be similar to Indonesia, with smaller contract sums but higher margins that can exceed 10%, compared with below 10% in Malaysia.
“Geopolitically, these are the two countries that we are looking at. We are starting on a smaller scale in Taiwan, just like when we first entered Indonesia back in 2014,” he added, noting that both markets pose no language barriers for its workforce and offer strategic advantages.
Aneka Jaringan has ventured into renewable energy engineering, procurement, construction and commissioning (EPCC) in Indonesia, though it has yet to contribute revenue.
Tse expects the segment to start contributing by the fourth quarter, with the group aiming to turn around by the first quarter of next year.
Meanwhile, he said Aneka Jaringan’s Indonesian operations are performing better than its Malaysian operations in terms of profit after tax and margins.
“So in Indonesia the margin, looks much better than in Malaysia. Simply because in Indonesia we are doing a lot of government jobs. When you do government jobs you don’t include material, you only do labour and equipment. That’s why the margin is higher,” Tse explained.
“In Malaysia, it’s different. You have to include everything including material, concrete and steel. But normally the margin for these two things is much lower. So that is the reason why in Indonesia we can get higher margin.”
Tse noted that the group’s revenue for the first nine months of its financial year has risen over 26% from a year ago, though there was a temporary dip in the third quarter after a strong second quarter peak.
“We expect earnings to rebound in the fourth quarter. The jobs in hand now, the majority come from the data centre and private jobs. We recently announced a RM72 million contract related to a data centre for EcoWorld. The job is very fast, it’s five months, so that will push up our revenue again for Q4 and for the year,” he added.
