CYBERJAYA: Dagang NeXchange Bhd (DNeX) is confident of bolstering its two core businesses namely information technology (IT) and energy with the ongoing restructuring and realigning of the group.
Recently-appointed group managing director Datuk Seri Syed Zainal Abidin Syed Mohamed Tahir said DNeX was in a good position to capitalise on digitalisation within its subsidiaries.
"I have been with the group for about two months and undertaken a review of the group's situation while at the same time studying the market condition.
"Now, the economy is in the stage of recovery, thus we need to plan ahead and look at what's happening in the global market and in Malaysia namely where the opportunities are," he said in his first media interview with the New Straits Times and Berita Harian recently.
Syed Zainal said DNeX would accelerate its digitalisation efforts to enhance efficiency and encourage cheaper cost of doing business.
"We believe we have the capability and capacity in the digital space. To be relevant in the digital environment, we have to invest in digital technology and continue to build our in-house capability," he said.
To implement the restructuring, DNeX requires the right structure with the right people, while instilling integration within the group, being closer to customers and forging new global technology partnership particularly from China and India.
"There is clarity on the structure that we want to implement that can be done in the next couple of months," he said, adding that DNeX was in the process of identifying the right people for senior and middle management.
Syed Zainal said non-core businesses within the group were likely to be consolidated or disposed. However, no decision had yet been made.
"We will have better clarity by end of this year. Next year, we will make some announcements. 2021 will be even challenging given the landscape that we operate today."
He said DNeX would continue to work with the government including the Royal Malaysian Customs Department and Finance Ministry to improve its IT solution services, particularly the National Single Window (NSW) for trade facilitation.
"We want to improve, make it easier for customers, and add new features and enhancements to our services that will enable customers to lower costs of their trade processes and operate more efficiently," he said.
Syed Zainal said DNeX was still in discussion with the government for the NSW contract extension for another three years.
The current two-year contract is from September 1 2019 until August 31 2021.
"I am quite confident that we should be able to convince the government to continue using our services. We have consistently met with required service level at 99.8 per cent – an acceptable level of service. There are also areas that we want to improve with a few changes to be made (add-value features)," he said.
NSW is an important business for DNeX as it contributes about 30 per cent to group revenue.
Under the IT segment, DNeX has been offering e-services for trade facilitation (NSW) since 2009, spanning across five concession contracts.
NSW is a single window to process and enable document exchange for trade.
"Another key segment in IT is system integration and consultancy where we will remain focus in the government sector – accounting system and services, digital transformation initiatives – in several ministries and government agencies including the immigration department contract.
"However, we cannot rely on the government alone. Hence, we are also looking for opportunities in the private sector in such segments as medical and healthcare services," he said.
Syed Zainal said DNeX's energy business in the oil and gas (O&G) sector would also be expanded by acquiring the remaining 70 per cent stake in Ping Petroleum Ltd (PING), an xploration and production outfit.
The acquisition is expected to be completed in the early first quarter of 2021, paving the way for the company to strengthen its presence as the national marginal field operator.
"PING has a unique value proposition with a low operating cost at US$19 per barrel of oil production. We hope to capitalise on capturing attractive producing brownfield assets that have become available from international O&G players under current market conditions," he said.
Syed Zainal said DNeX could reap about 40 per cent in revenue contribution to the group from PING after the acquisition.