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Wednesday, November 26, 2008

Gadang bidding for RM6b jobs

GADANG Holdings Bhd, a construction and property group, is bidding for some RM6 billion worth of infrastructure and construction contracts in the country and the Middle East, to ride out the global economic downturn.

It is bidding for an estimated RM4 billion worth of government jobs and private finance initiative (PFI) projects in Malaysia, and over RM2 billion worth of projects in Abu Dhabi in the United Arab Emirates.

Managing director and chief executive officer Tan Sri Kok Onn said Gadang expects to sign a pact with a partner in Abu Dhabi soon to work jointly on the projects there.

Abu Dhabi will be a new growth area for Gadang, which has been scouting for jobs there in the last two years.
Apart from Malaysia and the Middle East, the main board-listed firm is also exploring for infrastructure work to build water treatment and power plants in Vietnam and Indonesia.

It wants to be proactive in building its construction, property and utilities divisions despite concerns over the global financial market.

"We will grow the businesses cautiously. While there are lucrative projects in the pipeline in Malaysia and overseas, we will study the jobs first before making submissions," he told Business Times in an interview.

Kok said Gadang will remain resilient against the current market challenges and will continue to put in place various measures to reduce the impact of rising prices of construction materials on the operating margins.

The group hopes to do better financially this year, supported by its two ongoing contracts worth RM716 million to build the Kemuning-Shah Alam highway and the Cheras Rehabilitation Hospital.

Kok said its four water-supply concessions in Indonesia will also add to the group's revenue.

It also expects higher earnings from its property division, which has been enjoying brisk sales.

"Demand for cheaper housing has been on the uptrend. Buyers are looking for affordable homes in these trying times. We will continue to build them so long as there is continued demand," Kok said.

Gadang's construction orderbook stands at some RM550 million, with unbilled property sales worth RM50 million.

For the financial year ended May 31 2008, Gadang saw a 42.4 per cent drop in net profit to RM7.95 million, from RM13.80 million a year ago.

Revenue was RM172.50 million, down 23.7 per cent from RM225.96 million.

By Business Times (by Sharen Kaur)

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