Tuesday, July 31, 2012

Benalec (The Land Reclamation Industry … dated July 2012)

The cost for land reclamation projects is high due to the large amount of raw materials needed, use of expensive and sophisticated heavy machineries, labour force, time to complete and most importantly, the feasibility studies and engineering designs that are unique to each site.
Since 2006, the sector had grown by a resounding 68 per cent, largely due to the funds provided by the government under the 9th Malaysia plan.
Having various drivers to push the industry was crucial as this meant the industry was not dependent on any one particular sector. The land reclamation industry can be a beneficiary of the oil and gas sector, port and logistics sector, construction sector, property sector and so forth.
Among the major players in land reclamation locally are Benalec Holdings Bhd, Muhibbah Engineering Bhd and Galactic Maritime (M) Sdn Bhd.
The good thing about this industry is that it is a very niche business and not many companies have that specialty. Another reason why the prospects of land reclaimation companies will remain bright over the long-term is that some of them receive land parcels as partial payment of the reclamation job.
Benalec, for example, owns several parcels of land in Malacca in return for the reclamation works it did there. Having land in return can be beneficial, especially so if the value increases.
The order book of privately-held Galactic Maritime currently stands at about RM220 million, comprising of reclamation projects around the Iskandar economic region, including the Nusajaya waterfront development.
The company is also involved in the upgrading of ports, harbour and navigational waterways along the Tebrau Strait, Port Dickson, Klebang in Malacca, Pulau Indah near Klang and Jambatan PIAI in Johor.
Since 2003, Galactic Maritime has been involved in marine construction works in China 's southeast coastal areas, with the successful completion of projects in Zhejiang , Fujian and Guangdong .
About Benalec …
It is able to manufacture land and sell it at a margin.
It had sold two plots of reclaimed land in Kota Laksamana for rm45 psf and another deal done in June 2011 for rm28 psf. The total sale consideration for the 395175 sq ft leasehold land in Kota Laksamana was rm17.78 million while the price of the 1627405 sq ft land was rm45.57 million.
Sources say that Benalec has secured 2400 acres for land reclamation projects in Melaka. Of these, the group has reclaimed 1500 acres which have either been paid for in cash by clients or sold to the third party. In Melaka. Benalec still has roughly 900 acres more to go and it has been bidding for more land reclamation projects in Melaka, Johor and Penang .
In addition to land reclamation, it – which lists marine engineering and construction as its niche – has ventured into the construction of an oil and gas terminal in Tanjung Piai, Johor. However Benalec is not interested in owing the operating the terminal itself, or even in a JV with another party. Although it still holds a stake in the JV with Rotary, the stake will be small.
Apart from concession to reclaim 2485 acres in Tanjung piai, it has also been given the right to reclaim 1760 acres of land in Pengerang, which has been slated to become the region’s OG& refining hub with the planned investments by Petronas.and Dialog.

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