Integrax may be benefitted from Tenaga's expansion

Port operator finds itself in a sweet spot as it is likely to benefit from Tenaga’s expansion of its coal fired power plant in Manjung, Perak.

Tenaga is tipped to emerge as the winner of the 1000MW coal fired power plant. This new power plant is expected to be act as an extension to Tenaga’s existing facility in Manjung. If that happens, it will be a boon for Integrax as it will see an increase in coal throughput as its nearby deep water terminal – LBT – serving Tenaga’s bigger appetite for coal.

Tenaga’s success in winning the power plant tender will be the icing on the cake for Integrax, which is an associated company of Tenaga.

Integrax sealed a deal with Tenaga in 2012 for the handling of coal and provision of infra for the Manjung 4 power plant, an extension to the latter’s existing power plant located on the man made Lekir island.

With Manjung 4 in the pipeline and the potential win of another 1000MW plant by Tenaga, which could add another three million tones in terms of coal requirement, Integrax could potentially be looking at doubling the coal throughput at LBT.

Integrax had stated that the company is expecting the Lumut Manjung corridor to benefit from the Manjung 4 power plant as well as Vale International SA’s iron ore trans-shipment hub and pelletizing plant in Teluk Rubiah, Lumut.

Integrax is currently (July 2013) in discussions with Vale to determine Integrax’s level of participation in its projects.

News reports that the company is still keen on pursuing a tie up with the Brazilian mining giant for the provision of trnas-shipment services after an unnecessary attempt in 2009.

A successful tie up with Vale could boost Integrax’s earnings potential at its Lumut port, where it has a 50% stake less one share. The port is used for the handling of dry bulk, liquid bulk, containers and conventional cargo and project cargoes.

Tenaga is the single largest shareholder with a 22.12% stake in Integrax.

Integrax has a strong balance sheet with a cash pile of rm130 million. Its total borrowings stood at rm4.5 million as at March 31 2013.