SEB aims to re­turn to the black in FY17

> En­gi­neer­ing firm banks on leaner man­age­ment, cost-cut­ting mea­sures to turn around

The Sun (Malaysia) - - SUNBIZ - BY EE ANN NEE

BUKIT JALIL: Serem­ban En­gi­neer­ing Bhd (SEB) aims to make a profit in the cur­rent fi­nan­cial year end­ing June 30, 2017 (FY17) with the broad­en­ing of its cus­tomer base, cost-cut­ting mea­sures, which in­clude job cuts, and a project man­age­ment team (PMT) for site works, said ex­ec­u­tive di­rec­tor and COO Wong Wai Hung.

SEB has an out­stand­ing order book of RM60 mil­lion. It is cau­tiously op­ti­mistic that it is on the right track to ob­tain an en­cour­ag­ing order book in the com­ing pe­ri­ods.

“To­gether with a leaner man­age­ment, cost-con­trol and order book in hand, we can turn (around) the com­pany into (re­turn­ing to) the black,” Wong told SunBiz af­ter SEB’s AGM here yes­ter­day.

SEB has been in the red for the last two years, reg­is­ter­ing a net loss of RM36.38 mil­lion in FY16 and a net loss of RM6 mil­lion in FY15. The losses were mainly due to cost over­run from the Sabah Am­mo­nia Urea (Sa­mur) project as a re­sult of weak­nesses in project man­age­ment.

Wong said the im­pair­ment of Sa­mur project trade re­ceiv­ables will come in FY17 and SEB is con­fi­dent that its planned strate­gies and re­me­dial counter-mea­sures will see the group suc­cess­fully de­liv­er­ing pos­i­tive re­sults in FY17.

“Sa­mur is purely an in­stal­la­tion job (of equip­ment), which we are not fa­mil­iar with and not our strength. That is a bit­ter ex­pe­ri­ence to us and now we’re fo­cus­ing back on our core busi­ness of fab­ri­ca­tion of ves­sels and tanks,” he said.

SEB will fo­cus on its strength in the core busi­ness of stor­age tanks and ves­sels fab­ri­ca­tion for in­dus­tries such as oil and fats, wa­ter treat­ment, food in­dus­tries, chem­i­cal plants and oil re­finer­ies. It is also ex­plor­ing other op­por­tu­ni­ties by se­cur­ing turnkey order books from big­ger projects that in­clude power plants, new petro­chem­i­cal plants, phar­ma­ceu­ti­cal in­dus­try and high vol­ume struc­tural steel and shop pip­ing fab­ri­ca­tion works.

SEB is also look­ing to go into in­dus­tries such as palm oil re­fin­ery, chem­i­cal, waste man­age­ment, petro­chem­i­cal, food and phar­ma­ceu­ti­cal with wider prod­uct range in­clud­ing struc­tural steel and shop pip­ing fab­ri­ca­tion works. Wong said it now has 40 new cus­tomers in var­i­ous in­dus­tries.

In a move to cut costs and con­sol­i­date re­sources it is clos­ing down all four of its sub­sidiaries and two as­so­ciates by way of dis­posal and vol­un­tary wind­ing-up. This ex­er­cise is ex­pected to be com­pleted by year-end.

“We’re in the midst of down­siz­ing to an op­ti­mum level,” said Wong, adding that SEB plans to cut its to­tal work­force of 280 by 5%-10%.

SEB has es­tab­lished a PMT for site work to man­age and re­solve all re­lated mat­ters in a more ef­fi­cient man­ner. It is putting em­pha­sis on build­ing trust and bet­ter re­la­tion­ship with clients dur­ing the bid­ding stage of any project as well as on es­tab­lish­ing a strate­gic al­liance with com­pa­nies and in­di­vid­u­als based on the group’s fab­ri­ca­tion ca­pa­bil­i­ties.

The set­ting up of the PMT has en­hanced the ef­fi­ciency and ef­fec­tive­ness of the cost­ing sys­tem for bet­ter project man­age­ment, co­or­di­na­tion and con­trol within the group.

Wong said SEB has no im­me­di­ate plans to ap­point ad­di­tional board mem­bers af­ter two re­signed, and is con­fi­dent that the four board mem­bers left will be able to carry out the turn­around ex­er­cise for SEB.

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