PETALING JAYA: NWP Holdings Bhd’s wholly owned subsidiary, NWP Marine Sdn Bhd, has entered into a joint-venture (JV) agreement with OneOne Auro Marine Sdn Bhd (OOA Marine) to undertake contractor work to dredge, transport and load marine sand for export and to supply the material to local reclamation sites.
The JV operations will be undertaken by a JV company which will be established by NWP Marine (51%) and OOA Marine (49%).
NWP non-executive chairman Datuk Tan Lik Houe said the JV operations open up a new range of possibilities for the group to expand its revenue stream and venture into the sand-dredging business that will drive the group’s turnaround in the near-term.
“The new business’s potential helps generate recurring cash flow and steady income stream for the group,” he said.
Besides the diversification of its businesses to include sand mining, trading and export of sand and related activities, NWP is proposing a private placement of up to 10% of the total number of issued shares of the company.
OOA Marine is the operator appointed by OneOne Auro Sdn Bhd to provide sand extraction services at a concession area in Malacca for both export and local reclamation purposes by fulfilling an average order of five mother vessels every month for export purpose.
OneOne Auro is the exclusive and lawful dealer for marine sand export of the concession owner Bahtera Teroka Sdn Bhd in Malacca, and has been granted an exclusive right to manage and appoint operators to undertake activities involving extraction, dredging, transporting of marine sand from the concession area to ship-to-ship points and loading marine sand onto carrying mother vessels.
The concession owner has been granted a licence to extract marine sand in the territorial waters of Tanjong Keling, Malacca, for three years and approval from the Ministry of Energy and Natural Resources to export marine sand extracted from the concession area.
NWP Holdings executive director Tan Jyy Yeen said the diversification into sand dredging puts it on the front foot to expand its growth strategies over the next five years.
“In addition, since the business operations are low risk, as our role is to provide services for sand-dredging operations and transport the sand to mother vessels, we are not exposed to the risks from the volatility of oil prices and foreign exchange.
“Based on the current oil prices, the business operations are already operating with a healthy margin. This profit margin will expand once the oil prices normalise and moderate to a lower level,“ she said, adding that the successful venture into sand dredging will create an opportunity for the group to add value for its shareholders.
