mmc corporation berhad - executive version
TRANSCRIPT
360° Company Research Service
MMC Corporation BerhadMalaysia
15.02.2010Knowledge Management Competency Center Kirstin ScheuerThis Document is for Internal Use Only Christian Speed
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1 Spotlight on MMC Corporation Berhad
MMC Corporation BerhadLevel 8, Kompleks AntarabangsaJalan Sultan Ismail50250 Kuala LumpurMalaysia
Tel: +(603) 2142 4777Fax: +(603) 2148 9887
Web: www.mmc.com.my
CRM System Information:SAP Industry: Primary Metal & MiningPrimary SIC Code: 1099-Miscellaneous Metal Ores, NECCRM Business Partner ID: 1148643
Other Industry Information:Relevant SIC Codes: 1081-Metal Mining Services
1622-Bridge, Tunnel, and Elevated Highway Construction3842-Orthopedic, Prosthetic, and Surgical Appliances and Supplies8711-Engineering Services4499-Water Transportation Services, Not Elsewhere Classified4924-Natural Gas Distribution1629-Heavy Construction, Not Elsewhere Classified4939-Combination Utilities, Not Elsewhere Classified
MMC Corporation Berhad is a public parent company and the above mentioned location is headquarters.
1.1 Company SummaryMMC Corporation (MMC) is a utilities and infrastructure group with interests in transport and logistics, energy andutilities, and engineering and construction.
The company operates through three business segments: transport and logistics, energy and utilities, and engineeringand construction.
In transport and logistics segment, MMC's key businesses include the Port of Tanjung Pelepas (Malaysia's largestcontainer terminal) and Johor Port (Malaysia's leading multi-purpose port). In addition, MMC co-owns a 40-yearconcession to operate the SMART motorway. The 3-kilometre double-deck motorway is located within the mid-sectionof an 11-kilometre tunnel built primarily as a stormwater bypass tunnel, and provides traffic relief to the main gatewayto the city from the south.
The energy and utilities segment is engaged in power generation, natural gas distribution, waste management andrenewable energy, oil and gas engineering. The company owns 51% of Malakoff, one of largest independent powerproducers in Malaysia; and Gas Malaysia (Peninsular Malaysia's sole supplier of natural gas to the non-power sector).In this segment, MMC also has equity interests in the 900 MW (mega watt) and 1,030,000 m3/day Shuaibahindependent water and power plant project in Saudi Arabia, a 200,000 m3/day water desalination plant in Algeria, theCentral Electricity Generation Company in Jordan and the Dhofar Power Company in Oman. The segment alsoincludes MMC Oil & Gas, a gas engineering consultancy to the oil and gas and petrochemical industries in Malaysia
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and the region. The company's engineering design expertise covers key engineering areas like offshore oil and gasproduction and processing facilities, on-shore receiving facilities and loading terminals, refineries and petrochemicalplants. MMC Oil & Gas works with the world's largest oil and gas companies like ExxonMobil, Shell, Talisman, MurphyOil, Nippon Oil and Petronas.
The company's engineering and construction segment operates through its subsidiary, MMC Engineering &Construction, which provides design and build, turnkey and EPCC solutions in all major engineering disciplines,including civil and structural, plant design and mechanical, electrical and process control. In this segment, MMC is alsoundertaking electrified double tracking railway project between Ipoh and Padang Besar, Malaysia's one of largestinfrastructure projects. Through Zelan, MMC has interests in IJM, one of Malaysia's largest construction companies,and Zelan Construction, a specialist contractor for power plants.
MMC is also the joint master developer of the $30 billion 'Jazan Economic City' in Saudi Arabia with the Saudi BinladinGroup, and has an equity interest in the third container terminal project at Jeddah Port.
HistoryMMC Corporation's (MMC) history traced back to a UK-based company, Malayan Tin Dredging (MTD), which wasfounded in 1911.
MTD was moved to Malaysia in 1976 and merged with New Tradewinds to become the Malaysian Mining Corporation.
Malaysian Mining Corporation was listed on the main Board of the Kuala Lumpur Stock Exchange in 1977. In 1981,MTD merged with New Tradewinds Sdn Bhd which earlier took over London Tin Corporation (LTC), the tin miningcompany.
The 1997 merger of Homestake Mining Company (Homestake) with Plutonic resulted in the company's associateinterest in Plutonic being replaced by an investment stake in Homestake. MMC sold its stake in Homestake in 1998.
Impian Teladan acquired 19.9% stake in the company and also sold its stake in Ashton in 2000.
MMC completed its acquisition of a 22.7% stake in Malakoff, an independent power producer, in 2001. In the sameyear, MMC entered into a conditional share sale agreement with Seaport Terminal (Johore) for the acquisition of a50.1% stake in Pelabuhan Tanjung Pelepas (PTP) and acquired 50.1 % of PTP.
In 2002, Malakoff's wholly owned subsidiary, GB3, commenced commercial operations of its 430MW open cycle gasturbine power plant at Segari, Perak.
The MMC Engineering and Gamuda signed a joint venture agreement for SMART project in 2003.
MMC and Transfield Services sign joint-venture agreement to provide Asset Management Support Services in oil andgas, petrochemical and power generation sectors in 2005. In the same year, the shareholders of MMC approved theacquisition of a 19.9% equity interest in PTP.
The company acquired Johor Port and sold 30% stake in Malaysia Smelting Corporation Berhad (MSC) to subsidiariesof Straits Trading in 2006.
Nucleus Avenue (M) Berhad, a wholly owned subsidiary of MMC acquired the assets of Malakoff Berhad in early 2007.
In mid 2007, MMC acquired Malakoff's businesses. In late 2007, the company and the Saudi Binladin Group (SBG)signed a memorandum of understanding with Aluminum Corporation of China Limited (CHALCO) to establish a secondaluminum smelter at Jazan Economic City (JEC), Kingdom of Saudi Arabia.
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In March 2008, the company disposed off its entire equity interest in Konsortium Lebuhraya Butterworth-Kulim (KLBK)Sdn.
MMC's wholly owned subsidiary, MMC International Holdings, together with its partners, Saudi Binladin Group (SBG)and CHALCO HongKong Limited (CHALCO) (collectively the Investors), signed an agreement with the Saudi ArabianGeneral Investment Authority (SAGIA) to identify the areas in which SAGIA would provide assistance to facilitate theimplementation of the Aluminum Smelter Project, in May 2008.
MMC acquired water concession company, Aliran Ihsan Resources (AIRB), in October 2008.
In March 2009, the company's shareholders approved the acquisition of Senai Airport Terminal Services Sdn (SATS)by a majority of 97%.
In August 2009, Petronas agreed to a new gas supply agreement consisting of 300 million standard cubic feet per day(mmscfd) of natural gas to Gas Malaysia Sdn, a 41.8%-owned unit of MMC.
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1.2 Peer Analyses
MMC Corporation
Berhad
Tanjong Public
Limited Company
(Kuala Lumpur,
Malaysia)
Protasco Berhad
(Kuala Lumpur,
Malaysia)
Petronas Dagangan
Berhad
(Kuala Lumpur,
Malaysia)
Head DataFiscal Year Dec 2008 Jan 2009 Dec 2008 Mar 2009
Currency MYR MYR MYR MYR
# of Employees 5,000 2,484 1,350 1,700
Income Statement DataRevenue Growth 49.3% 35.7% 24.3% 9.3%
Revenue 8,545.03 mil 3,693.86 mil 629.15 mil 24,367.62 mil
Cost of Goods Sold 5,669.53 mil 2,107.86 mil 474.02 mil 22,654.62 mil
Gross Profit 2,875.50 mil 1,586.00 mil 155.13 mil 1,713.00 mil
EBITDA 3,420.00 mil. 1,420.70 milNo information
available.No information
available
Total Operating Income 2,180.70 mil 1,119.10 mil 74.24 mil 812.13 mil
Net Income 527.32 mil 463.77 mil 28.81 mil 578.67 mil
Balance Sheet DataAccount Receivables (AR) 980.66 mil 423.27 mil 227.43 mil 903.24
Account Payables (AP) 838.72 mil 193.16 mil 154.29 mil N/A
Inventory 674 mil 511.14 mil 5.01 mil 443.96 mil
Financial Performance Indicators (calculated)Days Sales Outstanding 42 42 132 14
Days in Inventory 43 89 4 7
Days Payable Outstand. 54 33 119 26
AR as % of Revenue 11.5% 11.5% 36.1% 3.7%
AP as % of Revenue 9.8% 5.2% 24.5% 6.6%
CoGS as a % of Revenue 66.3% 57.1% 75.3% 93.0%Net Income Margin (as %of Revenue) 6.2% 12.6% 4.6% 2.4%Revenue per Employee(mln) 1.71 1.49 0.47 14.33
IT Infrastructure InformationSAP User Yes Yes No No
CRM Business Partner ID 1148643 1156003 5866736 1154130
SAP Software Use SAP BW 3.0B
SAP R/3 4.6C
SAP EP 6.0 ON WEBAS 6.20
SAP R/3ENTERPRISE
47X200
Not Applicable Not Applicable
Non-SAP-Applications Careware Systems -ERP and CRM
solutions
No informationavailable.
No informationavailable.
Aspen Technology,Inc - AspenTech’s
solution
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1.3 Key Leadership ContactsBoard Committees
The Audit CommitteeThe Audit Committee comprises three independent Directors. The Chief Executive Officers and theauditors also attend committee meetings by invitation and provide reports as required. At least onemeeting is held annually with external auditors in private, without management's presence.
The Executive CommitteeThe Executive Committee comprises two executive Directors and two non-executive Directors. Itdecides on strategic and operational plans with defined limits, thereby reducing the Board’s agenda.The committee also reviews proposals before they are taken to the Board.
The Nomination CommitteeThe Nomination Committee comprises three non-executive Directors and reviews, two of whom areindependent. It makes recommendations to the Board on new Board appointments and evaluates theBoard’s effectiveness. The committee also reviews the succession planning framework and trainingprogrammes.
The Remuneration CommitteeThe Remuneration Committee comprises three non-executive Directors, one of whom is independent.It reviews the performance of executive Directors and employees’ annual bonuses and increments.
1.3.1 Board of Directors
Tan Sri Dato' Ir. (Dr.) Wan Abdul Rahman bin Haji Wan Yaacob (Director)Tan Sri Dato’ Ir. (Dr.) Wan Abdul Rahman bin Haji Wan Yaacob, 67, joined the board on 26 August1999 as a nonindependent, non-executive director and is a member of the audit and remunerationcommittees of the board.
Tan Sri Dato’ Ir. (Dr.) Wan Abdul Rahman served in thePublic Works Department since 1964 andbecame its Director General from 1990 until his retirement in 1996. Tan Sri Dato’ Ir. (Dr.) Wan AbdulRahman is a Malaysian citizen and holds a Diploma in Civil & Structural Engineering from BrightonCollege of Technology, United Kingdom. He is a Fellow of the following institutions: Chartered Instituteof Buildings (U.K.), Institute of Highways & Transportation (U.K.), Institute of Civil Engineers (U.K.),Institute of Engineers, Malaysia and Academy of Sciences, Malaysia.
Tan Sri Dato’ Ir. (Dr.) Wan Abdul Rahman is also the Chairman of IJM Corporation Berhad, LingkaranTrans Kota Holdings Berhad and Lysaght Galvanised Steel Berhad, and a board member of MalaysianIndustrial Development Finance Berhad, Saujana Consolidated Berhad, Northport Corporation Berhadand Bank of America Malaysia Berhad.
Datuk Hj Hasni Harun (CEO Malaysia)Datuk Hj Hasni Harun, 52, was appointed as Chief Executive Officer Malaysia and a board member on1 March 2008. He is also a member of the executive committee.
Datuk Hj Hasni Harun is a member of the Malaysian Institute of Accountants. He holds a Mastersdegree in Business Administration from United States International University, San Diego, Californiaand a Bachelor of Accounting (Honours) from University of Malaya.
Datuk Hj Hasni Harun held several senior positions in the Accountant General’s Office from 1980 to1994. He was the Senior General Manager of the Investment Department at the Employees ProvidentFund from 1994 to 2001, and the Managing Director of RHB Asset Management Sdn Bhd from 2001
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until 2006. He then joined DRB-HICOM Berhad as Group Chief Financial Officer until 2006 and joinedMMC as the Group Chief Operating Officer in January 2007 until February 2008, prior to hisappointment as Chief Executive Officer Malaysia.
Datuk Hj Hasni Harun is a Malaysian citizen and also sits on the boards of IJM Corporation Berhad,Zelan Berhad, Aliran Ihsan Resources Berhad, Malakoff Corporation Berhad, Johor Port Berhad, MMCEngineering Group Berhad and several private limited companies.
Feizal Ali (CEO International)Encik Feizal Ali, 48, was appointed to the board on 24 March 2004 and assumed the position of ChiefExecutive Officer International on 1 March 2008. He is also a member of the executive committee ofthe board.
Encik Feizal Ali joined the Company as the Special Advisor to the Chairman in September 2001 and inDecember 2001 assumed the post of Group Chief Financial Officer. He was promoted to the positionof Group Chief Operating Officer in March 2004 and Group Chief Executive in September 2006, beforeassuming the role of CEO International in March 2008. Prior to joining MMC, he was the VicePresident-Finance of Commerce Dot Com Sdn Bhd (1999-2001), Chief Financial Officer of PelabuhanTanjung Pelepas Sdn Bhd (1996-1999) and General Manager, Finance of Prolink Development SdnBhd (1994-1996).
Encik Feizal started his career in Accounting and Finance in the US banking industry (1985-1989) andsubsequently worked in the Middle East for five years (1989-1994).
Encik Feizal sits on the boards of MMC International Holdings Ltd, Jazan Economic City Land Ltd,Red Sea Gateway Terminal Ltd, MMC Saudi Arabia Ltd and MMC Utilities Ltd. He is also a boardmember of Malakoff Berhad.
Encik Feizal is a Malaysian citizen and holds a Bachelor of Science degree in Business Administration(Accounting) from Menlo College, USA, a Bachelor of Commerce degree from the University of Keralaand a Masters degree in Business Administration (Finance) from the University of Santa Clara,California.
Dato' Wira Syed Abdul Jabbar bin Syed Hassan (Chairman)Dato’ Wira Syed Abdul Jabbar bin Syed Hassan, 69, was appointed as a non-independent, non-executive Chairman of the Company on 7 July 2000. Dato’ Wira Syed Abdul Jabbar also chairs thenomination, remuneration and executive committees of the board.
Dato’ Wira Syed Abdul Jabbar was the Chief Executive Officer of the Kuala Lumpur CommodityExchange from 1980 to 1996, the Executive Chairman of the Malaysia Monetary Exchange from 1996to 1998 and the Executive Chairman of the Commodity and Monetary Exchange of Malaysia from1998 to 2000.
Dato’ Wira Syed Abdul Jabbar is a Malaysian citizen and holds a Bachelor of Economics degree and aMasters of Science degree in Marketing. He is also the Chairman of MARDEC Berhad, PadiberasNasional Berhad, Tradewinds Plantation Berhad, Tradewinds (M) Berhad and a board member of StarPublications (Malaysia) Berhad and KAF Discounts Berhad.
Dato' Abdullah bin Mohd. Yusof (Senior Independent Director)Dato’ Abdullah bin Mohd Yusof, 70, joined the Board on 31 October 2001. He is the Chairman of theAudit Committee and is the Senior Independent Director of the Board.
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Dato’ Abdullah is a partner in the legal firm of Abdullah & Zainuddin. He is also the Chairman of AeonCo. (M) Berhad and Aeon Credit Service (M) Berhad, and a Board member of Tradewinds CorporationBerhad and Zelan Berhad.
Dato’ Abdullah is a Malaysian citizen and holds a LLB (Honours) degree from the University ofSingapore.
Abdul Hamid Sheikh Mohamed (Independent Director)Encik Abdul Hamid Sheikh Mohamed, 44, was appointed to the Board as an Independent Director on3 August 2009. He is also a member of the Audit Committee.
Encik Abdul Hamid is currently an Executive Director of Symphony House Berhad. He started hiscareer in the accounting firm Messrs Lim Ali & Co. / Arthur Young, before moving on to merchantbanking with Bumiputra Merchant Bankers Berhad. He later moved to the Amanah Capital MalaysiaBerhad Group, an investment banking and finance group, where he led the corporate planning andfinance functions until 1998, when he joined the Kuala Lumpur Stock Exchange (KLSE), now knownas Bursa Malaysia Berhad. During his five years with the KLSE, he led KLSE’s acquisitions ofKLOFFE, COMMEX and their merger to form MDEX, and the acquisition of MESDAQ. He also ledKLSE’s demutualisation exercise.
Encik Abdul Hamid is a Malaysian citizen and a Fellow of the Association of Chartered CertifiedAccountants. He also sits on the Boards of Pos Malaysia Berhad, Hartalega Holdings Berhad, SILKHoldings Berhad (formerly known as Sunway Infrastructure Berhad) and Genesis Malaysia Maju FundLimited (listed on the London Stock Exchange).
Ahmad Jauhari bin Yahya (Director)Encik Ahmad Jauhari Yahya, 54, was appointed to the board as a non-independent, non-executivedirector on 23 May 2007.
Encik Ahmad Jauhari is currently the Managing Director/ Chief Executive Officer of MalakoffCorporation Berhad, a position he held since May 2007. From 1977 to 1979, he worked with ESSOMalaysia Berhad before joining The New Straits Times Press (M) Berhad (“NSTP”) as an Electricaland Electronic engineer. He was subsequently Engineering Manager (1982), Production andTechnical Director (1983), and then Senior Group General Manager, Production and Circulation(1990).
In 1992, he moved to Time Engineering Berhad as Deputy Managing Director, and in the same yearwas promoted to Managing Director. In 1993, he joined Malaysian Resources Corporation Berhad(“MRCB”) as Managing Director, before resigning a year later to take on the post of Managing Directorof Malakoff Berhad while remaining a director of MRCB. In July 1999, he was appointed a director ofNSTP and subsequently, the Executive Vice-President of MRCB in February 2000. In July 2000, heresigned from his executive presidency at MRCB as well as the directorships at MRCB and NSTP. In2007, Encik Ahmad Jauhari resigned as Managing Director of Malakoff Berhad while still remaining amember of its board.
He sits on the boards of Malakoff Berhad, Malakoff Corporation Berhad, Port Dickson Power Berhadand Aliran Ihsan Resources Berhad, and is the Honorary Vice President of Penjanabebas (Associationof Independent Power Producers, Malaysia).
Encik Ahmad Jauhari is a Malaysian citizen and holds a Bachelor of Science (Honours) degree inElectrical and Electronic Engineering from the University of Nottingham, United Kingdom.
Ooi Teik Huat (Independent Director)
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Encik Ooi Teik Huat, 49, was appointed to the Board as an Independent Director on 22 May 2008. Heis also a member of the Audit and Nomination Committees.
Encik Ooi holds a Bachelor Degree in Economics from Monash University, Australia. He began hiscareer with Messrs. Hew & Co (now known as Messrs. Mazars’) in 1984, before joining MalaysianInternational Merchant Bankers Berhad (now known as MIMB Investment Bank Berhad) in 1989 andsubsequently Pengkalen Securities Sdn Bhd (now known as PM Securities Sdn Bhd) in 1993. He iscurrently a director of Meridian Solutions Sdn Bhd.
Encik Ooi is a Malaysian citizen and also sits on the Boards of Johor Port Berhad, TradewindsPlantation Berhad, DRB-Hicom Berhad, Edaran Otomobil Nasional Berhad, Tradewinds (M) Berhadand Zelan Berhad.
Datuk Mohd Sidik Shaik Osman (Director)Datuk Mohd Sidik Shaik Osman, 60, was appointed to the board as a non-independent, non-executivedirector on 23 January 2003 and is a member of the remuneration and executive committees.
Upon graduation, Datuk Mohd Sidik served as Assistant Secretary, Ministry of Trade & Industry from1974 until 1979 and was subsequently appointed Principal Assistant Secretary, Ministry of Transport(Port Division) in 1979, a position he served until 1987. Whilst serving the Ministry of Transport, hetook study leave and obtained a Masters of Science (Maritime) degree from the World MaritimeUniversity, Sweden.
Upon obtaining his Masters Degree in 1988, he served as Secretary to the National Maritime Council,National Security Council and the Prime Minister’s Department. Between 1992 and 1996, he wasappointed as the Team Leader, Straits of Malacca Radar Project in the same department and laterbecame Deputy Director General of the National Security Division, Prime Minister’sDepartment.
Datuk Mohd Sidik left Government service to join Pelabuhan Tanjung Pelepas Sdn Bhd (“PTP”) in1997 as its Chief Operating Officer. In 1998, he was appointed as director of PTP and in the followingyear was promoted to Executive Director. He was appointed as the Chief Executive Officer of PTP inJanuary 2000 and assumed the post of Chairman in October 2005. He is also the Chief ExecutiveOfficer of Senai Airport Terminal Services Sdn Bhd and a board member of Johor Port Berhad.
Datuk Mohd Sidik is a Malaysian citizen and also holds a Bachelor of Social Science (Honours)(Economics) degree from Universiti Sains Malaysia.
1.3.2 Executive Management
Feizal Ali (CEO International)Same as Sec 1.3.1
Datuk Hj Hasni Harun (CEO Malaysia)Same as Sec 1.3.1
Shahrir Shariff (Director Projects Development)Shahrir Shariff, 45, is the Director Projects Development of MMC International Holdings Ltd. He hasover 23 years of experience mainly in project related development works. He started his career as anauditor with one of the big accounting firm in London and later in Kuala Lumpur.
In 1992, Shahrir joined Petronas and over the next 7 years was involved in the development of KLCCand later Putrajaya; on the corporate and business development side. He subsequently joined GIIGHoldings Sdn Bhd and was the COO of one of the companies involved in the proposed take over of
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the Bakun hydroelectric project and the setting up of an aluminum smelter project in Sarawak. In hiscurrent position, Shahrir was instrumental in the start-up and development of the Jazan Economic CityProject; a new industrial city in the Kingdom of Saudi Arabia.
Shahrir was admitted to the membership of the Institute of Chartered Accountants in England & Walesupon completing his articleship in London in 1990. Prior to that, he attained his Bachelor of Science inEconomics and Accountancy degree in 1985 at The City University, London. He is a member of theMalaysian Institute of Accountants.
Anwar Syahrin Ajib (Group Chief Financial Officer)Anwar Syahrin Ajib, 36, is Group Chief Financial Officer of MMC. Before he assumed his current role,he was the CFO of Port of Tanjung Pelepas, a subsidiary of MMC. Anwar is a trained charteredaccountant with stints at Ernst & Young in Kuala Lumpur and Arthur Andersen in Manchester, UnitedKingdom. He was also co-owner and Managing Director of Business Associates Consulting Sdn. Bhd.,a boutique consulting firm based in Kuala Lumpur. Anwar had also worked with Shell Malaysia TradingSdn Bhd in its downstream distribution division.
Anwar graduated with a Bachelor of Engineering degree from Imperial College, London and receivedhis MBA from University of Salford, United Kingdom. Anwar is a member of the Institute of CharteredAccountants in England and Wales and a member of the Malaysian Institute of Accountants.
Dr. Mabel Lee (Senior General Manager Corporate Planning)Dr. Mabel Lee, 54, is Senior General Manager of Corporate Planning at MMC. Prior to joining MMC,she had worked with JP Morgan Chase’s Kuala Lumpur office as Vice President of its InvestmentBanking Division.
Mabel is a Chartered Financial Analyst charterholder and holds a Bachelor of Accounting (First ClassHonours) degree from Universiti Malaya, MBA (with Distinction) from University of Hull, UnitedKingdom and Doctor of Business Administration degree from University of Newcastle, Australia. She isa member of the Malaysian Institute of Accountants, an Associate Member with Institut Bank-BankMalaysia and a member of ICAEW’s Corporate Finance Faculty.
Vincent Chiu (General Manager Contracts & Procurement)Vincent Chiu, 40, is the General Manager, Contracts & Procurement at MMC. He has considerableexperience in contracts administration and claims management of construction contracts involvingcombination of both local and international contractors. Prior to joining MMC, he was the Director ofHPRC Consulting Group (M) Sdn Bhd, a project management and contracts advisory consulting firmbased in Malaysia.
Vincent graduated with a Bachelor of Building degree from University of New South Wales, Sydneyand later received his Masters degree in Construction Management from the University of New SouthWales in 1992. He is a registered member with Australian Institute of Building (AIB); CharteredInstitute of Building, UK (CIOB); The Chartered Institute of Arbitrators, UK (CIArb); Society ofConstruction Law in Malaysia. He was the past Honorary Treasurer of the Chartered Institute ofArbitrators and a Council member of Charted Institute of Building here in Malaysia. He is the currentHonorary Auditor of Society of Construction Law (Selangor & KL).
Elina Mohamed (Group Legal Advisor /Acting General Manager, Human Resource)Elina Mohamed, 39, is the Group Legal Advisor and the Acting General Manager, Human Resource atMMC. She was retained as a Legal Assistant at Messrs. Shearn Delamore & Co. in 1995 and left thefirm in November 2001 as a Senior Legal Assistant.
Elina participated in the publication of Employment Terms and Conditions, Asia Pacific and was acommittee member of the Home Affairs and Human Resources Committee of the Malaysian
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International Chamber of Commerce and Industry. She is also a committee member of the KualaLumpur Aid Centre and a member of the Malaysia Canada Business Council.
Elina graduated with a Bachelor of Law degree from Leeds University in 1993 and was called to theEnglish Bar in 1994 at Lincoln's Inn. She was admitted as an Advocate & Solicitor of the High Court ofMalaya in 1995. She also obtained a Diploma in Syariah Law & Practice from the International IslamicUniversity in 1998.
Azharuddin Nordin (General Manager CEO Malaysia's Office)Azharuddin Nordin 45, is the General Manager, CEO Malaysia's Office. Azharuddin is primarilyresponsible for investor and media relations, economic research and performance management, andspecial projects. He has extensive background in equity research, with nearly 15 years of experienceas an investment analyst. He has held senior positions in foreign and local research institutions,including Maybank Group, AmInvestment Banking Group and Daiwa Securities.
Azharuddin graduated with a Bachelor of Science in Business Administration. He also holds a Diplomain Islamic Banking & Finance from International Islamic University Malaysia.
Ahmad Aznan Bin Mohd Nawawi (General Manager Group Corporate Secretarial)Ahmad Aznan Bin Mohd Nawawi, 49, is the General Manager, Group Corporate Secretarial at MMC.Prior to joining MMC Ahmad Aznan has held numerous senior management position in othercorporations including at KFC Holdings (M) Bhd, QSR Brands Bhd and Bursa Malaysia SecuritiesBhd. Ahmad Aznan graduated with a Bachelor of Law from University Technology Mara in 1985.
Dato' Khairul Yusni Hj Md Yusof (General Manager Government Liaison)He started his career with the Royal Malaysian Navy. His past appointments included as the NavalDefence Attache, Jakarta, Indonesia in 1994 and he opted for early retirement as the Commander ofthe Royal Malaysian Navy.
Dato' Khairul subsequently became the Private Secretary to Minister of Agriculture, Malaysia in 2001,Special Officer to Special Envoy Higher Education to the Prime Minister in 2004 and Special Officer toMinister in charge of Economic Planning Unit in the Prime Minister's Department from 2006 to 2008.
Dato' Khairul joined Encorp Berhad as Special Officer to the Chairman of Encop Berhad in 2008. Priorto this, Dato' Khairul is the Admin & HR Manager of Bukit Cahaya Country Resort, Manager ofVantage View Sdn Bhd and Director of Encorp Construct Sdn Bhd and Enfiniti Productions Sdn Bhd.
1.3.3 Supervisory Board
No information available
1.4 Company Hierarchy and Holdings
1.4.1 Company Hierarchy
Parent Company:MMC Corporation Berhad
Subsidiaries:Aliran Ihsan Resources BerhadAnglo-Oriental (Annuities) Sdn Bhd
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Anglo-Oriental (Malaya) Sdn BhdAnglo-Oriental (Malaya) Trustees Sdn BhdBernas Logistics Sdn BhdCity Island Holdings LimitedHypergantic Sdn BhdJohor Port BerhadJP Logistics Sdn BhdKonsortium Lebuhraya Butterworth - Kulim (KLBK) SdnBhdKramat Tin Dredging BerhadLabohan Dagang Galian Sdn BhdMalakoff AlDjazair Desal Sdn BhdMalakoff Corporation BerhadMalakoff Engineering Sdn BhdMalakoff Gulf LimitedMalakoff International LimitedMalakoff Jordan Generation LimitedMalakoff Technical (Dhofar) LimitedMESB Project Management Sdn BhdMMC AMEC Sdn BhdMMC Engineering & Construction Sdn BhdMMC Engineering Group BerhadMMC Engineering Services Sdn BhdMMC Frigstad Offshore Sdn BhdMMC International Holdings LtdMMC Marketing Sdn BhdMMC Oil & Gas Engineering Sdn BhdMMC Power Sdn BhdMMC Saudi Arabia LtdMMC Saudi Holdings LtdMMC Transport Engineering Sdn BhdMMC Utilities LimitedMMC-GTM Bina Sama Sdn BhdMMC-Shapadu (Holdings) Sdn BhdMMC-Transfield Services Sdn Bhd (dissolved)MMC-VME Sdn BhdNatural Analysis Sdn BhdPelepas Sdn BhdPelepas-Brigantine Services Sdn BhdPernas Charter Management Sdn BhdPrima Metal Industries Sdn BhdPrima Precision Sdn Bhd Pelabuhan TanjungRecycle Energy Sdn BhdSeaport Worldwide Sdn BhdSeginiaga Rubber Industries Sdn BhdSouthern Water Corporation Sdn BhdSouthern Water Engineering Sdn BhdSouthern Water Technology Sdn BhdTepat Teknik (Kejuruteraan) Sdn BhdTepat Teknik Sdn BhdTimah Securities BerhadTJSB Global Sdn Bhd
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TJSB International (Shoaiba) LimitedTJSB International LimitedTJSB Middle East LimitedTronoh Holdings (Selangor) Sdn BhdTuah Utama Sdn BhdWirazone Sdn Bhd
1.4.2 Company Holdings
Company PercentageGas Malaysia Sdn Bhd 41.8%Pelantar Teknik (M) Sdn Bhd 41.8%Gas Malaysia (LPG) Sdn Bhd 41.8%Segari Energy Ventures Sdn Bhd 47.8%Teknik Janakuasa Sdn Bhd 51%GB3 Sdn Bhd 38.3%Prai Power Sdn Bhd 51%Tanjung Bin Power Sdn Bhd 45.9%Desa Kilat Sdn Bhd 27.5%Tlemcen Desalination Investment CompanySAS 35.7%
1.5 Peer OverviewTanjong Public Limited
Company(Kuala Lumpur, Malaysia)
Protasco Berhad(Kuala Lumpur, Malaysia)
Petronas Dagangan Berhad(Kuala Lumpur, Malaysia)
Tanjong public limitedcompany (Tanjong) is aninvestment holding company.The Company's subsidiariesare engaged in powergeneration, gaming, leisureand property investment. TheCompany operates in foursegments: PowerGeneration, Gaming,Property Investment andLeisure. Power Generationrelates to the ownership,development and operationof power plants. Gamingcomprises the numbersforecast totalisator (NFO)and racing totalisator (RTO)businesses. PropertyInvestment relates to theleasing and maintenance ofMenara Maxis. Leisure refersto the operation of theTropical Islands resort and
Protasco Berhad is aMalaysia-based investmentholding company. TheCompany is organized intofour business segments:Construction Contracts,Engineering Services,Training and Education, andTrading. The Constructioncontracts segment isengaged in the constructionand maintenance of roads.The Engineering Servicessegment is engaged in theprovision of site investigationand soil testing services.Training and Educationsegment is engaged in theprovision of training andeducation services. Tradingsegment is engaged in thesale of construction materialsand petroleum products.Other business segments
PETRONAS DaganganBerhad is engaged in thedomestic marketing ofpetroleum products. TheCompany is the principaldomestic marketing arm ofPetroliam Nasional Berhad(PETRONAS), the national oilcompany, which holds69.86% of the Company'sequity. The Companymarkets a range of petroleumproducts, including motorgasoline, aviation fuel,kerosene, diesel, fuel oil,bunker fuel, lubricants,liquefied petroleum gas (LPG)and asphalt. It markets itsproducts throughout thecountry, directly to customers,as well as through its networkof service stations, LPGdealers and industrialdealers.
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TGV Cinemas Sdn Bhd, awholly owned subsidiary ofthe Company.
include investment holdingand production of pavementmaterials.
Key PeopleDau Meng Cheim(Independent Non-ExecutiveChairman of the Board)
Cheim Robert (Chairman)
Seow Eng Goh (ChiefExecutive Officer of PanMalaysian Pools Sdn Bhd.and TGV Cinemas Sdn Bhd.)
Augustus Ralph Marshall(Executive Director)
Peng Su Ong (ChiefExecutive Officer andExecutive Director ofTanjong Energy HoldingsSdn Bhd)
Gerard Nathan (Group ChiefFinancial Officer)
John Dolan (Chief OperatingOfficer - InternationalOperations of TanjongEnergy Holdings Sdn Bhd)
Yee Yuen Yin (ChiefOperating Officer of PanMalaysian Pools Sdn Bhd)
Hasnur Rabiain Bin Ismail(Executive Chairman of theBoard)
Azliza Binti Ahmad Tajuddin(Independent Non - ExecutiveDirector)
Ket Pen Chong (ManagingDirector, Director)
Lim Yew Ting (GeneralManager-Group CorporatePlanning)
Marina Jaal (GeneralManager-CorporateCommunications)Hooi Ling Khor (CompanySecretary)
Sofia binti Zakaria (ChiefAccountant)
Samsudin Taramuji (Head ofInformation Technology)
Anuar Bin Ahmad (Non-Executive Chairman of theBoard)
Mohamad Sabarudin BinMohamad Amin (ChiefExecutive Officer, ManagingDirector, Director)
Mohd Shobri Bin A. Bakar(General Manager - LubeBusiness Division)
Muhamad Bin Hashim(Senior Manager - BusinessTechnology Department)
Abdul Majeed Bin K.Kunheen (General Manager -Finance Services Division)
Haslina Bt Mohamed Tahir(General Manager - HumanResource Management &Administration ServicesDepartment)
Lee Ten Chai (SeniorManager-Health Service &Risk Management)
1.6 Company Strategy
1.6.1 Overall Strategy
MissionExcellence in their Core Business Segments
VisionTheir company’s vision is to be a premier Utilities and Infrastructure Group.
Values Integrity Innovation Teamwork Excellence Commitment
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Strategic objectives Maximise Shareholder Value Service Excellence to Stakeholders Lead in Value Innovation Be the Preferred Employer
Business Continuity Plan
MMC’s Business Continuity Plan (“BCP”) is a pro-active crisis management programme thataddresses how the organisation should react to unexpected business interruptions. It identifies thecritical elements which are required so that essential business functions are able to continue in theevent of unforeseen or difficult circumstances.
MMC is committed to employ appropriate strategies in anticipating and controlling crisis situations andto establish an emergency response team, who would execute the plan to ensure minimal disruption.
The Company also has a tested IT Disaster Recovery Plan directing the computer system recoveryprocess.
The plan focuses on the requirements necessary to restore the processing of the critical businesssystem applications at an alternate facility for an interim period following the loss of computer services.
1.6.2 C-Level Strategy Quotes
“We aim to ensure that our businesses continue to operate efficiently and generate the desiredfinancial returns. MMC is well-positioned to capitalise on the domestic growth opportunities and toextract maximum value from our portfolio of assets.”
On the international front, MMC International will continue to build on the strong foundation of theGroup’s activities and will pursue available opportunities in MMC’s core businesses. The bankingindustry has not stepped up its project financing activities and to the extent that this is not forthcomingin the later half of the year, the company will have to reevaluate the project economics of a delayedstart up. Given that MMC’s overseas projects are in the early developmental stage, sufficient flexibilityexists to incorporate modest delays.
Malaysia Datuk Hasni Harun (CEO)
1.7 Company Relationships
1.7.1 Joint Ventures
Dec 17, 2009MISC Berhad's Joint Venture With MMC Corp Berhad Unit And Pelabuhan Tanjung Pelepas Sdn. Bhd.Terminated-DJDow Jones reported that MISC Berhad's joint venture with MMC Corp Berhad unit and PelabuhanTanjung Pelepas Sdn. Bhd. has been terminated. Following the withdrawal by MISC Berhad from theGrand Alliance, which will become effective January 1, 2010 and the restructuring of its Liner businesshad agreed to mutually terminate the joint venture agreement.
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Jun 02, 2009MMC Corp Berhad Announces Agreement Between Pelabuhan Tanjung Pelepas Sdn. Bhd. and CMACGMMMC Corp Berhad announced that its 70% owned subsidiary, Pelabuhan Tanjung Pelepas Sdn. Bhd.(PTP), has entered into an agreement with CMA CGM to provide container terminal services to CMACGM for some of its container volumes in the region (Agreement).
Dec 17, 2008MMC Corp Berhad Announces Arbitration Proceedings By MMCEG-Gamuda Berhad Joint VentureAgainst Wayss & Freytag (Malaysia) Sdn BhdMMC Corp Berhad announced that its subsidiary, MMC Engineering Group Berhad (MMCEG), a partyto the MMCEG-Gamuda Berhad Joint Venture (the JV), issued a Notice of Arbitration to commencearbitration proceedings against Wayss & Freytag (Malaysia) Sdn Bhd (Wayss & Freytag). Thearbitration proceedings is commenced by the JV against Wayss & Freytag with regard to the DisputeAdjudication Boards (DAB) decisions in respect of the sub-contract for the construction of part of theStormwater Management and Road Tunnel Project.
Jul 25, 2008MMC Corp Berhad's MMC-Gamuda Joint Venture Sdn Bhd Receives ContractMMC Corp Berhad announced that its 50% jointly controlled entity, MMC-Gamuda Joint Venture SdnBhd, has signed the design and build contract for the Electrified Double Tracking Railway Project fromIpoh to Padang Besar with the Government of Malaysia valued at MYR12.485 billion (the Contract).
Aug 23, 2007MMC Corp Berhad Announces Formation Of A Joint Company Between MMC Oil & Gas EngineeringSdn Bhd And AMEC Group LtdMMC Corp Berhad announced that its subsidiary, MMC Oil & Gas Engineering Sdn Bhd (MMCOG),has entered into a shareholders agreement (SHA) with AMEC Group Ltd (AMEC), an internationalproject management and engineering services company registered in the United Kingdom, to establisha private limited company, to be named MMC AMEC Sdn Bhd (MMC AMEC). MMC AMEC will providecomprehensive engineering solutions for large-scale integrated deepwater facilities and marginal fielddevelopment in addition to engineering and project management services within the upstream anddownstream hydrocarbon sectors. The equity interest of MMCOG in MMC AMEC will be 51% andAMEC will have a equity interest of 49%. MMC AMEC shall have an initial issued and paid up capitalof MYR2,000,000. MMC AMEC will be a subsidiary of MMCOG.
1.7.2 Mergers & Acquisitions
Dec 02, 2009MMC Corp Berhad's Subsidiary Enters Into Share Sale And Purchase Agreement With PadiberasNasional BerhadMMC Corp Berhad announced that Johor Port Berhad (JPB), a wholly owned subsidiary of theCompany, has entered into a Share Sale and Purchase Agreement (SPA) with Padiberas NasionalBerhad (BERNAS) to divest its 75% equity interest comprising 12,000,000 ordinary shares ofMYR1.00 each in Bernas Logistics Sdn Bhd (BLSB) to BERNAS for a total cash consideration ofMYR11.76 million (Proposed Divestment).
Jul 08, 2009MMC Corp Bread's Subsidiary Acquires Senai High Tech Park Sdn BhdMMC Corp Berhad announced that Senai Airport Terminal Services Sdn Bhd, wholly owned subsidiaryof the Company, has acquired the entire issued and paid up share capital of Senai High Tech ParkSdn Bhd (SHTP). SHTP was incorporated on June 05, 2006 and has an authorised capital ofMYR100,000.00, divided into 100,000 ordinary shares of MYR1.00 each, and a paid up share capitalof two ordinary shares of MYR1.00 each. SHTP is currently dormant and is intended for the
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construction, development, marketing and management of the Senai High Technology Park and otheramenities thereto.
Apr 24, 2009MMC Corp Berhad Completes Proposed SATS AcquisitionMMC Corp Berhad announced that it has completed the proposed acquisition of 2,000,000 ordinaryshares of MYR1.00 each in Senai Airport Terminal Services Sdn Bhd (SATS) representing the entireissued and paid up share capital of SATS for a cash consideration of MYR1.70 billion (ProposedSATS Acquisition). In relation thereto, SATS has become a wholly owned subsidiary of the Company.
Nov 26, 2008MMC Corp Berhad Announces Conditional Take Over Offer For Equiventures Sdn BhdMMC Corp Berhad announced the conditional take over offer to acquire all the remaining ordinaryshares of MYR1.00 each in Equiventures Sdn Bhd (ESB) not already owned by the Company andAliran Ihsan Resources Berhad (AIRB), being the person acting in concert with the Company, (ESBOffer).
Aug 04, 2008MMC Corp Berhad To Acquire Airport Services, Water FirmsAFX Asia reported that MMC Corp Berhad plans to acquire water company Aliran Ihsan ResourcesBhd as well as Senai Airport Terminal Services Sdn Bhd in a deal worth $673.4 million.
Mar 13, 2008Plus Expressways Berhad Announces Completion Of Proposed Acquisition From MMC CorporationBerhadMMC Corp Berhad: Plus Expressways Berhad announced that the proposed acquisition by theCompany from MMC Corporation Berhad of the entire issued and paid up share capital of KonsortiumLebuhraya Butterworth-Kulim (Klbk) Sdn Bhd for a total cash consideration of MYR134 million hasbeen completed on March 13, 2008. Following the completion of the Proposed Acquisition, KLBK hasbecome a wholly owned subsidiary of Plus Expressways Berhad.
Nov 30, 2007MMC Corp Berhad Announces Completion Of Proposed AcquisitionMMC Corp Berhad announced that the proposed acquisition by MMC International Holdings Limited ofthe entire equity interest in City Island Holdings Limited has been completed on November 30, 2007
Jun 27, 2007MMC Corp Berhad's MMC International Holdings Limited, Announces Acquisition Of Focus PointLimitedMMC Corp Berhad announced that MMC International Holdings Limited, a wholly owned subsidiary ofthe Company incorporated in the British Virgin Islands (BVI), has acquired the entire issued and paidup share capital of Focus Point Limited (Focus Point), a company incorporated in the British VirginIslands.Terms of the deal were not disclosed.
Apr 25, 2007MMC Corp Berhad Announces Proposed Acquisition Of Malakoff BerhadMMC Corp Berhad announced the acquisition by nucleus avenue (m) berhad, a wholly ownedsubsidiary of the Company, of the securities of all the subsidiaries and the associate company ofmalakoff berhad (malakoff) together with all the assets of malakoff (other than the cash balance inmalakoff and the above securities) and the transfer, assignment or novation of all liabilities of malakofffor a cash consideration of MYR9,307,599,771 less any available cash balance in malakoff (proposedacquisition). The Company also announced that it proposed fund raising by nab through the issue ofnew ordinary shares of rm1.00 each in nucleus avenue (m) berhad together with new redeemableconvertible preference shares of MYR0.10 each in nucleus avenue (m) berhad, cumulative non-
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convertible islamic junior sukuk, islamic commercial papers and medium term notes issuanceprogramme and medium term notes issuance programme to be issued by nucleus avenue (m) berhadto finance the proposed acquisition.
1.7.3 Regional Operations / Activities
1.7.3.1 EMEA
UAE - 500 MW to 1,000 MW Coal Fired IPP Project value: US$2.5 bn Project timetable: Signed Basic Agreement on 17 July 2008. Financial close
targeted April 2009 Equity Stake: 80%
SAUDI ARABIA - Jazan Economic City (JEC) Project The JEC Project was launched by His Majesty The Custodian of the Two Holy
Mosques King Abdullah Abdul Aziz Al Saud on 4 November 2006 The Jazan Economic City (JEC) Project was launched by His Majesty The
Custodian of the Two Holy Mosques King Abdullah Abdul Aziz Al Saud on 4November 2006
MMC and the Saudi Binladin Group are the land owner and Master Developer ofthe JEC Project
SAUDI ARABIA - 850 MW to 1,100 MW and 1,000,000 m3/d IWPP Project value: US$5.5 bn Project timetable: Bid submitted on 28 June; confirmed by Client as Preferred
Bidder on 6 October 2008, currently in final negotiations for Power & Waterpurchase
Equity Stake: 20% JORDAN - 30 MW to 40 MW Wind Power Project
Project value: US$75 mn Project timetable: Received invitation from Government for detailed negotiations
following review of tender submission Equity Stake: 8.75%
PAKISTAN - 1,200 MW Imported Coal Power Project Project value: US$2.5 bn Project timetable: Feasibility Study submitted on 7 April 2008; Tariff Petition
delayed to June 2009
1.7.3.2 Americas
The Company does not have any operations in this region.
1.7.3.3 APJ
The Company has operations in Malaysia.
1.8 SAP Reference Material
1.8.1 SAP References of the Company
No information available.
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1.8.2 Applicable Industry Reference Material
Below are Primary Metal & Mining Industry listed companies that have successfully implemented SAPsolutions and scenarios.
Title Link
Metinvesthttp://smartdirectory.sap.corp:3080/Assets/asset.epx?id=a9df5792-3a46-4ac6-8916-8cd85b3c88c7
PT Timahhttp://smartdirectory.sap.corp:3080/Assets/asset.epx?id=535e874c-c833-48d5-ba53-1d2f9f4e5771
RAGhttp://smartdirectory.sap.corp:3080/Assets/asset.epx?id=dab67863-9e95-4c91-b0ea-a9ccf219420a
Dansk LandbrugsGrovvareselskab
http://smartdirectory.sap.corp:3080/Assets/asset.epx?id=cf5ae321-7b88-4f33-a061-dcf3ebc74125
esco – european saltcompany
http://smartdirectory.sap.corp:3080/Assets/asset.epx?id=16b80a4b-c11e-4b4a-b355-4a49bd90fc66
BHP Billiton SOASuccess Story
http://smartdirectory.sap.corp:3080/Assets/asset.epx?id=f0ef3a07-1045-4be8-93d2-7892bdf9f422
Zinifex Limited -Success Story
http://smartdirectory.sap.corp:3080/Assets/asset.epx?id=68c6fd8e-fb04-4cd5-893d-051d936d22a8
1.9 SAP Solutions mapped to the Companies Needs
Industry Specific Solutions- Can help you capture essential business information to share with users inside and outside yourorganization- Can focus on value-added projects while your business users help themselves to the reports theyneed to support timely, informed decision making.
Crystal Reports Offerings for IT and Business Usershttp://smartdirectory.sap.corp:3080/Assets/asset.epx?id=c92cebd4-a6a9-481e-b5d3-0a2725be65ad
-Can help you cut costs and improve productivity by eliminating paper forms and interacting withenterprise applications via straightforward electronic forms - both within your SAP software landscapeand beyond.
Automate Paper Processes with SAP Interactive Forms by Adobehttp://smartdirectory.sap.corp:3080/Assets/asset.epx?id=d985cfb7-1f8a-4d54-be35-348d172dd893
- Deliver knowledge, experience, and best practices for your SAP BusinessObjects informationmanagement solutions. Read about these key services, which include consulting support and tools fordata quality assessment, integration, migration, and governance.
SAP Services Offerings for Information Managementhttp://smartdirectory.sap.corp:3080/Assets/asset.epx?id=057e9258-bd70-4082-8ad5-460afa174c79
-Can work with you to quickly develop composite applications that meet your business requirements ata fixed cost.
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- Make-to-order composite application development services, combined with optional on-site coachingservices, help you reuse existing IT assets and respond agilely to business needs
Make-to-Order Composition for SAP Business Suitehttp://smartdirectory.sap.corp:3080/Assets/asset.epx?id=22889077-e799-4299-9cef-ecf8a1658b2e
- Can help your company comply with digital invoice regulations in Brazil.- Can save costs and support you with automated, certified, and secure communications at the stateand federal level.
Support Global Expansion with Trade and Financial Compliance: SAP BusinessObjects ElectronicInvoicing for Brazilhttp://smartdirectory.sap.corp:3080/Assets/asset.epx?id=9e64129f-ef8b-41fc-85c7-35de65320729
- Can meet digital invoice requirements with the SAP Electronic Invoicing application, which providesautomated, certified, and secure interfaces to government systems at the state and federal level.Improve supply chain effiency and customer service - and reduce costs.
Electronic Invoicing for Brazil - solution briefhttp://smartdirectory.sap.corp:3080/Assets/asset.epx?id=819f5e0b-5891-42d1-b502-3bbba7814cf7
- Experience firsthand immediate business insights, demonstrating the value of the interactiveexecutive dashboards created using SAP BusinessObjects solutions.
Executive Industry Dashboards from SAP - HP Try-and-Buy Programhttp://smartdirectory.sap.corp:3080/Assets/asset.epx?id=a29fd87d-279e-47a6-9ccb-3fa037a1fd0a
- Can standardize and streamline procurement processes while satisfying regulations with the SAPProcurement for Public Sector package- Increases purchasing power, improves efficiency and service levels, lowers cost, and reduces therisk of contractual noncompliance.
Streamlined and Compliant Procurement for Public Entitieshttp://smartdirectory.sap.corp:3080/Assets/asset.epx?id=b212da82-fbb3-48a8-a796-44c585ba086b
- Can help you gain greater visibility into your operations and asset performance. You can increaseuptime, narrow process variability, control maintenance costs, react faster to process upsets, andsatisfy customers more consistently.
Improving Asset Visibilityhttp://smartdirectory.sap.corp:3080/Assets/asset.epx?id=a65686b9-2f27-421b-871b-4b83df5f6357
- Meridium Solution Brief Meridium Solution Brief
http://smartdirectory.sap.corp:3080/Assets/asset.epx?id=6f5e4d06-e5f3-47fc-878f-51bd725be55f
-Help paper and forest companies perform diverse operational and logistical activities, from forestmanagement to mill wood purchasing.-Provide real-time operations management with planning, business operations, and production controlfunctionality.
Manage and Integrate Operations Across the Enterprisehttp://smartdirectory.sap.corp:3080/Assets/asset.epx?id=1bb0abb8-e33f-4eed-8198-a04d07a615e4
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2 Industry Snapshot
2.1 Overall SAP Industry
Industry: Primary Metal & Mining (Global Metals & Mining)
Market DefinitionThe metals and mining industry consists of the aluminum, iron & steel, precious metals & minerals,coal and base metal markets. In the aluminum market, only production of primary aluminum isconsidered. Recycled aluminum is not included within this report.
The market is valued at manufacturer's selling price (MSP). The base metals market consists of lead,zinc, copper, nickel and tin. The market has been valued as total primary metal production at annualaverage prices.
The coal market consists of just primary coal (anthracite, bituminous and lignite). Secondary coal(metallurgical coke, anthracite and bituminous briquets, and lignite briquets) is not included in thisreport. The market has been valued as total mine production at annual average minemouth prices anddoes not include any transportation costs.
The iron & steel market consists of the production of crude steel, blast furnace (pig) iron and directreduced iron. Market values have been calculated using annual average steel and iron prices. Theprecious metals & minerals market includes gold, silver, platinum, palladium, rhodium and industrialand gem-quality diamonds. The market is valued using total annual mining production volumes andannual average prices.
For the purpose of this report the global figure is deemed to comprise of the Americas, Asia-Pacificand Europe.
The Americas comprises Argentina, Brazil, Canada, Chile, Colombia, Mexico, Venezuela, and the US.
Europe comprises Belgium, the Czech Republic, Denmark, France, Germany, Hungary, Italy,Netherlands, Norway, Poland, Romania, Russia, Spain, Sweden, the Ukraine and the UnitedKingdom.
Asia-Pacific comprises Australia, China, Japan, India, Singapore, South Korea and Taiwan.
Research HighlightsThe global metals and mining industry generated total revenues of $1,661.1 billion in 2008,representing a compound annual growth rate (CAGR) of 15.3% for the period spanning 2004-2008.
Iron & steel sales proved the most lucrative for the global metals and mining industry in 2008,generating total revenues of $1,052.6 billion, equivalent to 63.4% of the industry's overall value.
The performance of the industry is forecast to decelerate, with an anticipated CAGR of 6.6% for thefive-year period 2008-2013, which is expected to drive the industry to a value of $2,290.5 billion by theend of 2013.
Market AnalysisThe global metals and mining industry posted fluctuating rates of growth over the past four years.Decline is expected for 2009 followed by an acceleration of growth over the forecast period.
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The global metals and mining industry generated total revenues of $1,661.1 billion in 2008,representing a compound annual growth rate (CAGR) of 15.3% for the period spanning 2004-2008. Incomparison, the European and Asia-Pacific industries grew with CAGRs of 13.3% and 16.2%respectively, over the same period, to reach respective values of $407.6 billion and $898.8 billion in2008.
Iron & steel sales proved the most lucrative for the global metals and mining industry in 2008,generating total revenues of $1,052.6 billion, equivalent to 63.4% of the industry's overall value. Incomparison, sales of coal generated revenues of $306.2 billion in 2008, equating to 18.4% of theindustry's aggregate revenues.
The performance of the industry is forecast to decelerate, with an anticipated CAGR of 6.6% for thefive-year period 2008-2013, which is expected to drive the industry to a value of $2,290.5 billion by theend of 2013. Comparatively, the European and Asia- Pacific industries will grow with CAGRs of 2.8%and 9.3% respectively, over the same period, to reach respective values of $467.2 billion and $1,403.1billion in 2013.
Market ValueThe global metals and mining industry grew by 8.5% in 2008 to reach a value of $1,661.4 billion.
The compound annual growth rate of the industry in the period 2004-2008 was 15.3%.
Market Segmentation IIron and steel sales dominated the global metals and mining industry in 2008, generating 63.4% of theindustry's overall revenues.
Coal sales generated 18.4% of the industry's aggregate revenues.
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Market Segmentation IIAsia-Pacific leads the global metals and mining industry, accounting for 54.1% of the industry's overallvalue.
Europe accounts for a further 24.5% of the industry's value.
Competitive LandscapeThe metals and mining industry will be analyzed taking companies engaged in primary metalproduction and mining as players. The key buyers will be taken as industrial consumers, andproducers of equipment, IT providers, and suppliers of raw materials as the key suppliers.
Given the centrality of scale economies within the metals and mining industry there is a continuingtendency towards concentration. The leading players are large multinationals who dominate themarket. Buyers come from numerous industries and the industry players can rely on a relatively largenumber of customers.
The need to defend margins against rising raw material prices serves as a driver of vertical integration,evident in the fact that major steel and aluminum companies often own their own iron ore and bauxitemines. Whilst it is possible to enter the industry it does require significant investment outlay, essentialto build production facilities. This constitutes a strong entry barrier and raises exit costs, which tends toreduce rivalry in the industry. However, large-scale production and high fixed costs - especially energy– block many new players from entering the industry.
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The global metal and mining industry will by analyzed by focusing on steel and coal as together theyform the core of the industry Therefore, the key industry players are companies engaged in primarysteel production and coal mining. Buyers represent various industries, but mainly include automotive,construction and engineering firms utilizing metals in the production of their goods.
The aerospace industry is a key buyer of aluminum (and also specialty steels). Power generationcompanies are major buyers of coal. The average buyers are usually large companies. Goods such assteel or coal are commoditized and manufacturers need to meet accepted quality criteria, so there is alow level of product differentiation in this industry.
The size of average buyers and a lack of strong product differentiation boosts buyer power. Steel andcoal are widely used and have various applications. This means that industry players can rely on arelatively large number of customers overall, which reduces buyer power.
Most buyers are unlikely to integrate backwards into manufacturing because the capital outlayinvolved would be very high, and they often operate in industries very different than metals andmining. Players may, however, integrate forwards into certain businesses, such as engineeredproducts.
Steel manufacturers, for instance, may sell fabricated items as well as simple sheets, rods, wire etc.,and coal mining companies can enter the power generation industry, as Peabody Coal has done in theUS. This, as well as the necessity of these products to the success of the buyers' business, tends todilute the power of buyers, which is assessed overall as moderate.
Suppliers in this industry include producers of mining and production equipment, IT providers and alsosuppliers of raw materials such as the iron ore, coal and coke needed for the production of steel.Although some players rely on raw material producers, many are highly vertically integrated andprovide their own raw material. This strategy helps to decrease a company's dependence on third-party suppliers and offers additional revenue stream if raw materials can be sold to other companies.This potential for backward integration also weakens supplier power however it does requiresignificant investment.
Companies involved only in mining have suppliers in terms of equipment, IT, labor, and so on, as theyare the providers of raw materials to manufacturers. However, they must ensure adequate reserves,as coal and metal ores are non-renewable. This means that major landowners, governments, andsimilar bodies can be viewed as suppliers, and exert strong power. In general, supplier power isweakened by the fact that the metals and mining industry is integral to supplier revenues. Miningequipment, for example, is so specialized that manufacturers would find it difficult to sell to anycustomer outside the industry.
Similarly, the quality and availability of the raw materials is essential to the efficient running of themetals and mining industry. Consequently, concerns about the future availability and cost of inputs insteel production could affect the industry dramatically,placing more power in the hands of suppliers.Overall supplier power in this industry is moderate.
There is a strong tendency towards integration in the metals and mining industry. Cross-bordermergers have been taking place for several years. The attention is focused on technologicalimprovements and new products. Through integration, companies tend to strengthen their position,lower production costs, and expand towards new markets.
To enter the industry and make ground against incumbents that are cushioned by scale economies itis necessary to integrate. This trend puts smaller and weaker companies out of the industry andlowers the risk of newcomers. The metals and mining industry faces increasingly stringent
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environmental regulations, and companies are under pressure to develop cleaner and more efficienttechnologies.
Recent years have seen the punitive costs for violations of environmental regulations increase,threatening margins. In fact, they now include criminal penalties in some jurisdictions. Governmentsuse a variety of strategies, e.g. tariffs, subsidies, loans and import restrictions to ensure that theindustry remains competitive domestically. In many cases, this has allowed the local industry tocontinue operations even where better quality, cheaper commodities could be imported from anothercountry. Fixed costs in this industry are high as the main outgoings are transportation and energywhich have both faced increased prices. These factors can discourage potential entrants, leaving onlya moderate threat from newcomers.
There are potential substitutes for metal available. Stone or brick can be used in building construction,carbon fiber materials may be substitutes for aluminium in aerospace applications, less-commonmaterials like fiberglass (glass-reinforced plastic) can be especially advantageous in the automotiveindustry, where manufacturers are looking to use lighter materials.
The benefits of this include an improvement in fuel consumption, there can sometimes be a reductionin manufacturing costs, and some plastics are as recyclable as steel. Furthermore, metals such assteel can corrode whereas reinforced plastic is more durable.
However, not all buyers will replace metals with these alternatives as they do not provide all of thesame properties and are hardly 'drop-in replacements'. Using them would require substantial re-toolingof an assembly line. Thus, although the price of the alternatives may be favourable in some marketconditions, switching costs are likely to be very high.
Similarly, coal has several substitutes in the power generation market: oil, gas, nuclear fuels, etc.However, while power companies can alter their primary energy mix to a small extent without incurringmany costs, a thoroughgoing transition to these substitutes would require investment in differentgeneration facilities, which constitutes a very high switching cost. The threat of substitutes overall isviewed as weak.
The metals and mining industry is concentrated and is represented by a limited number of large,multinational players offering similar products and services within each segment.
Metal is a commodity difficult to diversify strongly, however different customers may require differentspecifications (e.g. consistency in physical properties, variations in strength and rigidity etc) andproducers may tend to specialize, thereby reducing competition but also limiting the size of theirpotential market.
Although some of the players have other businesses and are often geographically diversified,insulating them from fluctuations in particular markets, their relative lack of diversification increasesrivalry.
The centrality of scale economies in the metal and coal industry favours larger companies, whichmeans that deeper consolidation through mergers and acquisitions is to be expected, especially in themore fragmented markets.
Exit barriers are high, because many of the major tangible assets are highly specific to their industry,and thus harder to divest. In this situation, players are strongly motivated to remain in the industryeven when conditions are difficult, boosting rivalry. However, this is a cyclical industry, in which growthcannot always be sustained. Industry margins are susceptible to changes in raw material and energyprices. Overall, rivalry is assessed as strong.
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Key Market PlayersArcelor MittalBHP Billiton GroupThyssenKrupp AGRio Tinto Group
2.2 Industry Overview of SIC Industry
Industry: 1099-Miscellaneous Metal Ores, NEC (Metals & Mining in Asia-Pacific)
Market DefinitionThe metals and mining industry consists of the aluminum, iron & steel, precious metals & minerals,coal and base metal markets. In the aluminum market, only production of primary aluminum isconsidered. Recycled aluminum is not included within this report.
The market is valued at manufacturer's selling price (MSP). The base metals market consists of lead,zinc, copper, nickel and tin. The market has been valued as total primary metal production at annualaverage prices.
The coal market consists of just primary coal (anthracite, bituminous and lignite). Secondary coal(metallurgical coke, anthracite and bituminous briquets, and lignite briquets) is not included in thisreport. The market has been valued as total mine production at annual average minemouth prices anddoes not include any transportation costs.
The iron & steel market consists of the production of crude steel, blast furnace (pig) iron and directreduced iron. Market values have been calculated using annual average steel and iron prices. Theprecious metals & minerals market includes gold, silver, platinum, palladium, rhodium and industrialand gem-quality diamonds. The market is valued using total annual mining production volumes andannual average prices.
For the purpose of this report the global figure is deemed to comprise of the Americas, Asia-Pacificand Europe.
The Americas comprises Argentina, Brazil, Canada, Chile, Colombia, Mexico, Venezuela, and the US.
Europe comprises Belgium, the Czech Republic, Denmark, France, Germany, Hungary, Italy,Netherlands, Norway, Poland, Romania, Russia, Spain, Sweden, the Ukraine and the UnitedKingdom.
Asia-Pacific comprises Australia, China, Japan, India, Singapore, South Korea and Taiwan.
Research HighlightsThe Asia-Pacific metals and mining industry generated total revenues of $899.1 billion in 2008,representing a compound annual growth rate (CAGR) of 16.2% for the period spanning 2004-2008.
Iron & steel sales proved the most lucrative for the Asia-Pacific metals and mining industry in 2008,generating total revenues of $577.2 billion, equivalent to 64.2% of the industry's overall value.
The performance of the industry is forecast to decelerate, with an anticipated CAGR of 9.3% for thefive-year period 2008-2013, which is expected to drive the industry to a value of $1,403.1 billion by theend of 2013.
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Market AnalysisThe Asia-Pacific metals and mining industry suffered decline in 2008 after showing a very healthygrowth rate over the 2004-2007 period. This rate of growth is set to increase once again from 2009onward.
The Asia-Pacific metals and mining industry generated total revenues of $899.1 billion in 2008,representing a compound annual growth rate (CAGR) of 16.2% for the period spanning 2004-2008. Incomparison, the Chinese and South Korean industries grew with CAGRs of 16.3% and 16.8%respectively, over the same period, to reach respective values of $536.4 billion and $54.1 billion in2008.
Iron & steel sales proved the most lucrative for the Asia-Pacific metals and mining industry in 2008,generating total revenues of $577.2 billion, equivalent to 64.2% of the industry's overall value. Incomparison, sales of coal generated revenues of $196.6 billion in 2008, equating to 21.9% of theindustry's aggregate revenues.
The performance of the industry is forecast to decelerate, with an anticipated CAGR of 9.3% for thefive-year period 2008-2013, which is expected to drive the industry to a value of $1,403.1 billion by theend of 2013. Comparatively, the Chinese industry will increase with a CAGR of 13.3%, and the SouthKorean industry will decline with a compound annual rate of change (CARC) of -5.3%, over the sameperiod, to reach respective values of $1,002.3 billion and $41.2 billion in 2013.
Market ValueThe Asia-Pacific metals and mining industry shrank by 0.4% in 2008 to reach a value of $899.1 billion.
The compound annual growth rate of the industry in the period 2004-2008 was 16.2%.
Market Segmentation IIron and steel sales dominated the Asia-Pacific metals and mining industry in 2008, generating 64.2%of the industry's overall revenues.
Coal sales generated 21.9% of the industry's aggregate revenues.
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Market Segmentation IIChina leads the Asia-Pacific metals and mining industry, accounting for 59.7% of the industry's overallvalue.
Japan accounts for a further 14.5% of the industry's value.
Competitive LandscapeThe metals and mining industry will be analyzed taking companies engaged in primary metalproduction and mining as players. The key buyers will be taken as industrial consumers, andproducers of equipment, IT providers, and suppliers of raw materials as the key suppliers.
Given the centrality of scale economies within the metals and mining industry there is a continuingtendency towards concentration. The leading players are large multinationals who dominate themarket. Buyers come from numerous industries and the industry players can rely on a relatively largenumber of customers.
The need to defend margins against rising raw material prices serves as a driver of vertical integration,evident in the fact that major steel and aluminum companies often own their own iron ore and bauxitemines. Whilst it is possible to enter the industry it does require significant investment outlay, essentialto build production facilities. This constitutes a strong entry barrier and raises exit costs, which tends toreduce rivalry in the industry. However, large-scale production and high fixed costs - especially energy– block many new players from entering the industry.
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This analysis will centre on steel consumption, a core component of the industry. So industry playerswill be taken as steel makers.
These companies make products such as steel rod, wire, and sheets. End users include companiesinvolved in industries such as the automotive and construction industries, as well as stockholders andservice centers. In some countries, there is a tendency for high-volume end-users to purchase direct,while low-volume customers buy from stockholders and service centers.
This leads to the typical size of buyers being quite large. However, steel is so widely used that industryplayers can rely on a relatively large number of customers overall, which reduces buyer power. On theother hand, steel is commoditized with little to distinguish between the products of competitors in thisindustry, boosting buyer power to an extent.
However, players in developed economies - mindful of the surge in Chinese capacity - are seeking todifferentiate themselves by focusing on added-value specialty products, especially when selling in themore mature markets.
Most buyers are unlikely to integrate backwards into steel making, whereas steel makers are prone tointegrate forwards into certain buyers' businesses, such as engineered products. Steel manufacturers,for instance, may sell fabricated items as well as simple sheets, rods, wire etc.
This, as well as the necessity of these products to the success of the buyers' business, tends to dilutethe power of buyers, which is assessed as moderate overall. Suppliers in this industry includeproducers of mining and production equipment, IT providers and also suppliers of raw materials suchas the iron ore, coal and coke needed for the production of steel. Although some players rely on rawmaterial producers, many are highly vertically integrated and provide their own raw material. Thisstrategy helps to decrease a company's dependence on third-party suppliers and offers additionalrevenue stream if raw materials can be sold to other companies. This potential for backwardintegration also weakens supplier power however it does require significant investment.
Companies involved only in mining have suppliers in terms of equipment, IT, labor, and so on, as theyare the providers of raw materials to manufacturers. However, they must ensure adequate reserves,as coal and metal ores are non-renewable. This means that major landowners, governments, andsimilar bodies can be viewed as suppliers, and exert strong power.
In general, supplier power is weakened by the fact that the metals and mining industry is integral tosupplier revenues. Mining equipment, for example, is so specialized that manufacturers would find itdifficult to sell to any customer outside the industry. Similarly, the quality and availability of the rawmaterials is essential to the efficient running of the metals and mining industry.
Consequently, concerns about the future availability and cost of inputs in steel production could affectthe industry dramatically, placing more power in the hands of suppliers. Overall supplier power in thisindustry is moderate.
There is a strong tendency towards integration in the metals and mining industry. Cross-bordermergers have been taking place for several years. The attention is focused on technologicalimprovements and new products. Through integration, companies tend to strengthen their position,lower production costs, and expand towards new markets.
To enter the industry and make ground against incumbents that are cushioned by scale economies itis necessary to integrate. This trend puts smaller and weaker companies out of the industry andlowers the risk of newcomers. The metals and mining industry faces increasingly stringentenvironmental regulations, and companies are under pressure to develop cleaner and more efficienttechnologies.
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Recent years have seen the punitive costs for violations of environmental regulations increase,threatening margins. In fact, they now include criminal penalties in some jurisdictions. Governmentsuse a variety of strategies, e.g. tariffs, subsidies, loans and import restrictions to ensure that theindustry remains competitive domestically.
In many cases, this has allowed the local industry to continue operations even where better quality,cheaper commodities could be imported from another country. Fixed costs in this industry are high asthe main outgoings are transportation and energy which have both faced increased prices. Thesefactors can discourage potential entrants, leaving only a moderate threat from newcomers.
There are potential substitutes for metal available. Stone or brick can be used in building construction,carbon fiber materials may be substitutes for aluminium in aerospace applications, less-commonmaterials like fiberglass (glass-reinforced plastic) can be especially advantageous in the automotiveindustry, where manufacturers are looking to use lighter materials.
The benefits of this include an improvement in fuel consumption, there can sometimes be a reductionin manufacturing costs, and some plastics are as recyclable as steel. Furthermore, metals such assteel can corrode whereas reinforced plastic is more durable.
However, not all buyers will replace metals with these alternatives as they do not provide all of thesame properties and are hardly 'drop-in replacements'. Using them would require substantial re-toolingof an assembly line.
Thus, although the price of the alternatives may be favourable in some market conditions, switchingcosts are likely to be very high. Similarly, coal has several substitutes in the power generation market:oil, gas, nuclear fuels, etc.
However, while power companies can alter their primary energy mix to a small extent without incurringmany costs, a thoroughgoing transition to these substitutes would require investment in differentgeneration facilities, which constitutes a very high switching cost. The threat of substitutes overall isviewed as weak.
The metals and mining industry is concentrated and is represented by a limited number of large,multinational players offering similar products and services within each segment.
Metal is a commodity difficult to diversify strongly, however different customers may require differentspecifications (e.g. consistency in physical properties, variations in strength and rigidity etc) andproducers may tend to specialize, thereby reducing competition but also limiting the size of theirpotential market. Although some of the players have other businesses and are often geographicallydiversified, insulating them from fluctuations in particular markets, their relative lack of diversificationincreases rivalry.
The centrality of scale economies in the metal and coal industry favours larger companies, whichmeans that deeper consolidation through mergers and acquisitions is to be expected, especially in themore fragmented markets.
Exit barriers are high, because many of the major tangible assets are highly specific to their industry,and thus harder to divest. In this situation, players are strongly motivated to remain in the industryeven when conditions are difficult, boosting rivalry. However, this is a cyclical industry, in which growthcannot always be sustained. Industry margins are susceptible to changes in raw material and energyprices. Overall, rivalry is assessed as strong.
Key Market PlayersBHP Billiton Group
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Nippon Steel CorporationJFE HoldingsShanghai Baosteel Group Corporation
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3 Appendix
3.1 Press Clipping
3.1.1 MMC Corporation Berhad - Financial Analysis Review
Publication Date: February 9, 2010Source (Link): www.factiva.com
MMC Corporation Berhad (MMC Corporation) is an investment holding company. It is engaged intransportation, logistics, energy and utilities; engineering and construction business. It is also involvedin the operation of privatized highway, port operations, fabrication, erection of power transmissionlines, power generation and design, and construction of public light rail system. MMC holds equitystakes in Pelabuhan Tanjung Pelepas (70%), Johor Port (100%) and SMART Motorway Concession(50%). MMC is the largest shareholder in Malakoff (51%), which is an independent power producerand natural gas distribution company, Gas Malaysia (41.8%), among others.
Global Markets Direct's MMC Corporation Berhad - Financial Analysis Review is an in-depth business,financial analysis of MMC Corporation Berhad. The report provides a comprehensive insight into thecompany, including business structure and operations, executive biographies and key competitors.The hallmark of the report is the detailed financial ratios of the company
Scope
- Provides key company information for business intelligence needs The report contains criticalcompany information - business structure and operations, the company history, major products andservices, key competitors, key employees and executive biographies, different locations and importantsubsidiaries.
- The report provides detailed financial ratios for the past five years as well as interim ratios for the lastfour quarters.
- Financial ratios include profitability, margins and returns, liquidity and leverage, financial position andefficiency ratios.
Reasons to buy
- A quick "one-stop-shop" to understand the company.
- Enhance business/sales activities by understanding customers' businesses better.
- Get detailed information and financial analysis on companies operating in your industry.
- Identify prospective partners and suppliers - with key data on their businesses and locations.
- Compare your company's financial trends with those of your peers / competitors.
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3.1.2 MMC’s first overseas port starts operations
Publication Date: 22 December 2009Source (Link): http://www.mmc.com.my/content.asp?menuid=100042&rootid=100003&PressId=115
The UASC vessel Al-Mutanabbi was the first vessel to call on the first phase of the new world–classcontainer terminal, the Red Sea Gateway Terminal at Jeddah Islamic Port (“JIP”). The new terminalstarted its operations today with the opening of its first berth. JIP handles approximately 73% of SaudiArabia’s total container trade and is strategically located close to the southern entrance of the SuezCanal - one of the world’s most important international waterways.
MMC Corporation Bhd (“MMC”) holds an associate stake in the SAR2 billion terminal, which wascompleted earlier this month. The terminal comprises three berths and has a capacity to handle 1.8million TEU annually. It is also equipped with state-of-the-art cranes. An added feature of the terminalwhich sets it apart from others is its 300m wide dedicated navigation channel and deep water draughtup to 18m which can give access to the new generation of container ships.
“This marks MMC’s first foray into the ports and logistics business outside of Malaysia”, said Feizal Ali,CEO International of MMC. “The terminal has started its operations within our targeted timeline. Withthe extensive experience gained in developing and managing our own ports in Malaysia, we areconfident that this project will be a success and will provide MMC with a healthy long-term recurringincome.”
Aamir A. Alireza, CEO of RSGT said, "Less than 2 years ago we broke the ground on this project anddespite facing a challenging year, our first ship has berthed on schedule. The realization of the firstphase of the terminal is a result of much more than excellent construction and world-class equipment:it is a testament to the accomplishments made possible by successful partnerships”. “I would also liketo extend my appreciation to the solid support of our shareholders, especially MMC of Malaysia, aleader in ports and infrastructure development, who have worked alongside us in turning our terminalinto a commercial reality", continued Alireza.
This maiden call represents the start of a new era for JIP as a transshipment hub on the Red Sea.With the launch of RSGT’s commercial operations, the annual capacity of JIP is estimated to increaseby 45%. With its state of the art equipment and facilities, RSGT promises operational efficiency andprovides fully integrated solutions for customers.
3.1.3 Petronas agrees new gas supply with MMC’s Gas Malaysia
Publication Date: 20 August 2009Source (Link): http://www.mmc.com.my/content.asp?menuid=100042&rootid=100003&PressId=113
Petronas today agreed to a new gas supply agreement consisting of 300 million standard cubic feetper day (mmscfd) of natural gas to Gas Malaysia Sdn Bhd, a 41.8%-owned unit of MMC CorporationBerhad (MMC). The agreement will enable Gas Malaysia to provide long term supply of natural gas toits industrial users, which will incur lower energy costs from using competitively-priced natural gas.
MMC’s CEO Malaysia Datuk Hasni Harun said “We are pleased that negotiations with our partner,Petronas, have been successfully concluded. The new gas supply agreement will enable GasMalaysia to reach out to more industrial customers. Gas will continue to be an important source of fuelto industrial, commercial and residential users. The higher sales volume will also enhance theearnings of Gas Malaysia, a key earnings contributor to MMC Group, which accounted for 35% of2008’s profit before tax.”
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Gas Malaysia is the sole supplier of natural gas to the non-power sector and currently supplies energyto over 31,000 residential and 600 commercial customers as well as industrial customers throughoutPeninsular Malaysia. With the increase in gas supply, Gas Malaysia is expected to expand its gaspipeline network, which currently covers 1,642 km, and thereby reaching out to more customers.
MMC’s strong portfolio of assets, such as Malakoff and Gas Malaysia, generate a healthy annual cashflow due to its long-term concessions. MMC's engineering and construction division is currentlyundertaking major infrastructure projects such as the RM12.5 billion electrified double tracking railwayproject. This division will continue to pursue opportunities in large infrastructure projects domesticallyin order to enhance its order book of RM4.7 billion. MMC’s ports, Johor Port and Port of TanjungPelepas (PTP), have seen a gradual recovery in volumes over the past three months. Year-to-dateJuly 2009, PTP in particular, has registered a 3% year-on-year increase in container throughput.
Hasni added “We aim to ensure that our businesses continue to operate efficiently and generate thedesired financial returns. MMC is well-positioned to capitalise on the domestic growth opportunitiesand to extract maximum value from our portfolio of assets.”
3.1.4 MMC adds Senai International Airport to Logistics Portfolio
Publication Date: March 20, 2009Source (Link): http://www.mmc.com.my/content.asp?menuid=100042&rootid=100003&PressId=111
MMC Corporation Bhd’s (MMC) shareholders today approved the acquisition of Senai Airport TerminalServices Sdn Bhd (SATS) by a majority of 97%, thus expanding its logistics business, in line with itsvision to become a global utilities and logistics group. On completion, the acquisition will result inMMC owning 100% equity interest in SATS.
The acquisition of SATS will enable MMC to widen its involvement in the transport and logisticsbusiness into the area of air logistics, in addition to the company’s existing port operations and land-based logistics business. This will allow MMC to offer its customers an integrated logistics solutionand multi-modal connectivity via its sea, land, air transportation and logistics business. MMC CEOMalaysia Hasni Harun said “This acquisition will enable MMC to exploit SATS’s potential in becominga regional cargo and logistics hub under a Free Zone flagship which would be synergistic to thebusiness and prospects of our transport & logistics division. Senai airport is also well-positioned tobenefit from the growth potential of Iskandar Malaysia.”
MMC will pay RM1.7 billion in cash for SATS comprising RM580 million for Senai International Airportand RM1.12 billion for SATS’s 2,718 acres of freehold land slated for development as an Airport City.The acquisition of SATS would be a strategic fit for MMC as the airport and the land provide the groupwith an added competitive advantage in the transport and logistics sector, one of MMC’s three corebusinesses. With this acquisition, MMC will own the only privatised airport in the country and thisacquisition will create value to the Group’s transport and logistics business.
Hasni said, “We are acquiring SATS now at an early stage of its growth cycle. The price MMC ispaying for the airport operations translates to RM395 per passenger, which is 55% lower than theaverage price transacted for airports of RM870 per passenger for the past three years.”
SATS handled 1.46 million passengers in 2008, a 10% growth over the 1.32 million passengers ithandled in 2007, and expects continuing growth attributable to increasing traffic mainly driven byIskandar Malaysia. The airport is currently served by major airlines providing wide connectivity toregional airports within three to four hours’ flight time.
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3.1.5 MMC expects business to improve in second half
Publication Date: 26 May 2009Source (Link): http://www.mmc.com.my/content.asp?menuid=100042&rootid=100003&PressId=112
MMC Corporation Bhd (“MMC”) today said that the Group was facing a challenging period in 2009 andthat earnings would be impacted due to the slowdown in global trade affecting ports and lowerelectricity demand affecting power producers.
Speaking to reporters following the conclusion of the Company's thirty-third annual general meeting,MMC's CEO Malaysia, Hasni Harun said that “MMC’s businesses are closely co-related with the globaleconomy so our earnings will inevitably be affected. However, the economic indicators worldwide areimproving, suggesting signs of recovery. Yet, it is difficult to say at this stage whether this is an actualrecovery or merely stabilisation.”
As a measure of declining global trade, ports in the region have experienced a drop in volumes ofbetween 15% and 20% since the fourth quarter of 2008, and MMC’s ports, the Port of TanjungPelepas and Johor Port, have similarly been affected. There was a promising upturn in volumes inApril 2009 although this may be due to short-term inventory restocking and may not necessarily pointtowards a sustained recovery.
The weak domestic economy is also impacting electricity demand and despatch levels of the country’spower plants, particularly Malakoff’s coal-fired Tanjung Bin power plant, due to the higher coal pricerelative to gas. Zelan’s losses for the nine-month period ending 31 December 2008, as announced byZelan in February, will also impact MMC’s earnings.
“We are facing tough times but MMC’s diversified earnings base will help the Group thrive under thesedifficult market conditions”, said Hasni. Gas Malaysia operates a recession-proof gas reticulationbusiness that is expected to continue providing MMC with stable earnings and cash flow. The RM12.5billion electrified double tracking railway project, now 25% completed, is also making good progressand will provide MMC with a strong income stream for the remaining 5 years.
On the international front, MMC International will continue to build on the strong foundation of theGroup’s activities and will pursue available opportunities in MMC’s core businesses. The bankingindustry has not stepped up its project financing activities and to the extent that this is not forthcomingin the later half of the year, the company will have to reevaluate the project economics of a delayedstart up. Given that MMC’s overseas projects are in the early developmental stage, sufficient flexibilityexists to incorporate modest delays.
Last year, MMC Group’s revenue grew by 49% to RM8.5 billion, the highest in MMC’s history, due tothe 12-month consolidation of Malakoff’s results. Net profit declined by only 5% to RM527 million in2008 despite substantial provisions of RM382 million, principally due to the impact of the one-offwindfall profit levy on Malakoff.
Hasni added, “Sustaining last year’s performance will indeed be challenging given the currenteconomic conditions. Due to the current adverse economic scenario, we expect our results this yearto be less satisfactory compared to the previous year. Nevertheless, we are leveraging on our trackrecord in the engineering and construction sector to actively pursue domestic infrastructure projects”.