EXPANSION STRATEGY
Unit will complement firm’s 3 core segments in O&G industry, says MD
DELEUM Bhd i s studying a new business segm ent as part of its growth plan ov er the next three to five years. The new activity is expected to omplement its current focu s in the oil and gas ind stry.
Ammong the new changes thhat could be expected, apaart from the addition of a fourrth business, are new product aand service offerings.
NAN YUSRI NAN RAHIMY,
D Deleum Bhd group managing director
DELEUM Bhd is studying a fourth business segment, believed to be related to the energy sector, as part of its expansion plan. The company now has three core business segments, which are power and machinery, oilfield services and integrated corrosion solutions.
Group managing director Nan Yusri Nan Rahimy said the new business, which he declined to elaborate, would complement its three core businesses in the oil and gas (O&G) industry.
At the same time, the company is aggressively expanding the three existing businesses.
“Now is the crunch time for the company, and we have a three to five-year direction plan under- way. It is time for us to put in our strategy because by the end of the year, we will present to the board our direction for the next three to five years.”
Yusri said part of the plan might include acquisitions focusing on other upstream businesses.
“Among the changes that could be expected, apart from the addition of a fourth business, are new product and service offerings. For acquisitions, we have looked at a lot of companies but it is quite difficult to get close-out at the moment.”
Yusry also mentioned about a possible acquisition for the year ahead.
“There are a lot of emotional attachments to the business and it could be a bit difficult. I hope it will materialise by next year.”
National oil company Petroliam Nasional Bhd (Petronas) had
called for consolidations, mergers and acquisitions as it would help players survive the industry’s volatility.
However, few companies have welcomed this push. Some have since closed due to the inability to sustain under the lower crude oil price environment.
“From our point of view, the O&G industry will maintain its status quo for the next three years at least,” said Yusri.
He said Deleum, one of the recent winners of a maintenance, construction and modification (MCM) contract valued at about RM1 billion, was switching gears and going into next year more aggressively.
Deleum, via its 60 per centowned subsidiary Deleum Primera Sdn Bhd, was awarded the MCM contract by Petronas Carigali Sdn Bhd.
Deleum’s order book currently stands at RM2.95 billion.
Petronas Carigali’s MCM contracts are said to have a combined value of between RM5 billion and RM6 billion.
Meanwhile, Brent crude oil price rallied to a high of US$61.70 (RM261) on Wednesday.
Maybank Investment Bank had earlier predicted that Brent crude oil would test the upper resistance of US$61.
“We believe there is still room to the upside. Brent could potentially charge towards the next resistance, around US$63.30 to US$67.10.
“Therefore, while Brent is expected to notch higher, the underlying risk has also increased. For now, we see support at US$58.40 and US$53.50 if there is any profit-taking activity in between,” said the research firm.