KUALA LUMPUR: Propel Global Bhd is looking for prospects for its technical construction services by leveraging multinational firms (MNCs) expanding in Malaysia, particularly Penang.
Propel Global, formerly Daya Materials Bhd, will be focusing on industrial facilities, plants and commercial buildings in the northern region, especially the growing commercial and industrial sectors of Batu Kawan and Bayan Lepas Industrial Development Zone in Penang.
Executive director and group chief executive officer Angeline Lee said despite the challenges posed by Covid-19 and the economic downturn, these areas in Penang had experienced exceptional growth and activity in recent years, and this growth is not slowing down in the foreseeable future.
"The robustness of the investment scene in Penang by both foreign direct investments (FDI) and domestic direct investments (DDI) provides ample opportunities for the company, which has more than 20 years of experience in providing building construction and maintenance services to multinational corporations in Northern Malaysia," she told the New Straits Times.
Propel Global's recent and completed projects for MNCs, among others, included HP Malaysia Manufacturing Sdn Bhd, B Braun Medical Industries Sdn Bhd and Plexus Manufacturing Sdn Bhd.
Penang has succeeded in boosting investments and opportunities in major industries including electrical and electronics (E&E), machinery and equipment (M&E), medical technology and other innovative fields.
The state's success can be attributed to its robust industry ecosystem and talent pool, which have helped businesses achieve supply chain resiliency and operational advantage.
As an attractive investment destination, Penang drew in RM76.2 billion of total approved manufacturing investments in 2021, a surge of 440 per cent year-on-year (YoY). FDIs contributed 98 per cent of the approved manufacturing investments of RM74.4 billion in 2021.
Projects from Intel Electronics and Ibiden Electronics and other global top-notch firms in a range of functionality and high-tech disciplines were among the notable FDIs in Penang for 2021, while DDIs projects included Greatech Integration (M) Sdn Bhd.
"We have tendered for some sizeable construction contracts, ranging from RM50 million to RM200 million, and discussions have progressed well," Lee said when asked about the progress in securing contracts for building technical services.
Propel Global is also taking advantage of increasing crude oil prices as it explores opportunities in the oil and gas (O&G) industry.
"We are expanding our field engineers because we have expanded our technology services in the O&G industry. This strategy has been successful in that two major O&G operators have signed service contracts with us, and we hope to have more such contracts given the higher crude oil prices and the higher demand," Lee said.
When asked how the wireline business will support the O&G division's success, she explained that the wireline division provided conveyance for tools and devices to be delivered downhole in wells for drilling operations.
"We currently have the tools, devices, and the wireline's ownership. We will then not only expand our versatility and range of tools and services with the client but offer a more integrated package offering," she said.
Propel Global is exploring opportunities in Sabah and Sarawak for the O&G segment.
According to Lee, the current high crude oil prices would stimulate further investment, particularly from big oil companies.
Propel Global undertook a regularisation plan and took over the listing status of Daya Materials on April 28 this year.
On the company's order book of both divisions for this financial year, Lee said the proceeds from the private placement would allow Propel Global to undertake projects and self-sustain the working capital requirements of new projects.
"For the upcoming fiscal year, we are targeting an order book of about RM100 million for the O&G segment and RM450 million for technical services," she said.
Lee acknowledged a perception in the market that the current major shareholders and management of Propel Global was a carry-over from Daya Materials.
"We are reaching out to the market to correct that perception, but this will take time. Simultaneously, we are also working to engage the market with more positive news flows on project awards that will lift the company's financial performance, and we hope this will come soon.
"We also want to point out that due to the funding from the recent private placement, we now have a healthy cash balance while our gearing ratio has been reduced to 0.6 times," she said.
Propel Global initiated a private placement exercise after receiving shareholder approval at the company's extraordinary general meeting on Jan 21 this year.
Under the exercise, the company raised RM50.0 million which was used for listing expenses and working capital.
Lee said Propel Global was undergoing a business transformation, with the operations being streamlined for more sustainable growth.
"We understand that legacy issues weigh the company down. We couldn't change past events, but we will create value for the company and shareholders. While we are confident in the prospects of Propel Global, we truly believe that this will change as the business transformation take root," she added.