VIVOCOM Intl Holdings Bhd has found a game changer by securing a lucrative sand mining project.
In a filing to Bursa Malaysia this evening, Vivocom Intl Holdings Bhd announced that V Development Group via one of its subsidiaries has secured a ‘massive win’ worth in excess of US$934.7 mil (RM3.79 bil).
Rain International Sdn Bhd is a 97% owned subsidiary under the V Development Group which was recently merged into the Vivocom Group. The company’s proposed acquisition of V Development Group had been recently approved by the relevant authorities.
Rain International is principally involved in the mineral trading and exportation business, supplying sand to its client mainly in Hong Kong and China for reclamation and construction works.
The company has recently signed a contract for the supply of marine sand for a minimum period of three years.
The contract is for the supply of sand to Zhen Hua Engineering Company Ltd-China Communications Construction Company Ltd-CCCC Dredging (Group) Company Ltd (ZHEC-CCCC-CDC), a joint venture contractor appointed to undertake the main reclamation works for the Hong Kong International Airport Three Runway System Project.
Vivocom CEO Datuk Seri Chia Kok Teong is optimistic that the contract would be extended for another two to three years and could potentially generate revenue of up to RM6 bil.
“The sand business is a major boost because it gives us tremendous visibility,” he justified. “The potential revenue is huge, recurring and highly scalable.”
Besides the reclamation works for the Hong Kong International Airport, the rapid pace of construction and reclamation works in China and Singapore also requires heavy demand for sand, which is a considerable boon to Malaysia.
“We are starting with three years but the contract can easily be increased to five years and beyond, with higher tonnage shipped every six months. The exportation of sand will increase sharply over time,” noted Chia.
“I have in fact urged my team to secure up to RM10 bil worth of sand contracts by end-2021. This is part of our overall transformation strategy to become a multi billions conglomerate.”
At the close of today’s trading, Vivocom was down 1 sen or 0.94% at RM1.05 with 22.8 million shares traded, thus valuing the company at RM601 mil. – Feb 26, 2021
