PROPEL GLOBAL TO RIDE ON MNC INVESTMENTS
It targets order book of RM100m for O&G, RM450m for technical services segments
PROPEL Global Bhd is looking for prospects in technical construction services through multinational corporations (MNCs) which are expanding in Malaysia, particularly in Penang.
Propel Global will focus on industrial facilities, plants and commercial buildings in the northern region, especially in the growing commercial and industrial sectors of Batu Kawan and Bayan Lepas Industrial Development Zone in Penang.
Executive director and group chief executive officer Angeline Lee said despite the challenges brought about by Covid-19 and the economic downturn, these areas in Penang have experienced exceptional growth and activity in recent years, and the growth is not likely to slow down in the foreseeable future.
“The robustness of the investment scene in Penang, from both foreign direct investment (FDI) and domestic direct investment (DDI), provides ample opportunities for the company, which has more than 20 years of experience in providing building construction and maintenance services to MNCs in the northern region,” she told the New Straits Times.
Propel Global’s recent projects involve MNCs such as HP Malaysia Manufacturing Sdn Bhd, B Braun Medical Industries Sdn Bhd and Plexus Manufacturing Sdn Bhd.
Penang has been successful in boosting investments in major industries, including electrical and electronics, machinery and equipment, medical technology and other innovative fields.
The state’s success is attributed to its robust industry ecosystem and talent pool, which have helped businesses achieve supply chain resiliency and operational advantage.
Penang drew RM76.2 billion in approved manufacturing investments in 2021, a surge of 440 per cent year-on-year. FDI made up 98 per cent of the approved manufacturing investments at RM74.4 billion.
Projects from Intel Electronics, Ibiden Electronics and other global firms covering a range of functionality and high-tech disciplines were among the FDI in Penang last year. DDI projects included those from Greatech Integration (M) Sdn Bhd.
“We have tendered for some sizeable construction contracts, ranging from RM50 million to RM200 million, and discussions have progressed well,” said Lee when asked about the firm’s progress in securing contracts for building technical services.
Propel Global is also exploring opportunities in the oil and gas (O&G) industry.
“We are expanding our field engineers because we have expanded our technology services in the O&G industry. This strategy has been successful as two major O&G operators have signed service contracts with us, and we hope to have more such contracts given the higher crude oil price and demand.”
On how the wireline business will support the O&G division, she said the wireline division provides conveyance for tools and devices to be delivered downhole in wells for drilling operations.
(A wireline is an electrical cable used to lower tools into and transmit data about the conditions of the wellbore.)
“We have the tools, devices and the wireline ownership. We will not only expand our versatility and range of tools and services but will also offer a more integrated package.”
Propel Global is also exploring O&G opportunities in Sabah and Sarawak.
Lee said the high crude oil price environment will stimulate further investments, particularly from big oil companies.
On April 28, Propel Global undertook a regularisation plan and took over the listing status of
Daya Materials Bhd.
Lee said the proceeds from the private placement will allow Propel Global to undertake projects and sustain the working capital requirements of new projects.
“For the upcoming fiscal year, we are targeting an order book of about RM100 million for the O&G segment and RM450 million for the technical services segment.”
Lee acknowledges there is market perception that the major shareholders and management of Propel Global are a “carryover” from Daya Materials.
“We are reaching out to the market to correct that perception, but this will take time. Simultaneously, we are working to engage the market with more positive news flows on project awards that will lift the company’s financial performance, and we hope this will come soon.
“We also want to point out that due to the funding from the recent private placement, we now
have a healthy cash balance and our gearing ratio has been reduced to 0.6 times.”
Propel Global had initiated a private placement exercise after receiving shareholders’ approval at an extraordinary general meeting on Jan 21.
Under the exercise the company raised RM15 million, which was used for listing expenses and working capital.
Lee said Propel Global was undergoing a business transformation, with the operations being streamlined for more sustainable growth.
“We understand that legacy issues can weigh the company down. We couldn’t change past events, but we will create value for the company and shareholders.
“We are confident about the prospects of Propel Global, we truly believe that this will change as the business transformation takes root,” she added.