Minetech...dated May 2008

It has set aside RM41 million for capital expenditure (capex) in 2008 and 2009 to secure more quarries, amidst preliminary plans to enter high-growth construction markets in the Middle East and Vietnam.

The planned expansion for Minetech, already with aggregate-producing quarry operations across Malaysia, Indonesia and China, is expected to spur the company’s foreign earnings to about a tenth of revenues in 2008. Aggregates or crushed stones are used mainly in the construction of buildings and roads.

Minetech’s capex for financial years 2008 and 2009 involves a sum of RM20 million and RM21 million respectively. Of the total, RM39 million will be spent on machinery and equipment. The remaining RM2 million will be used to secure and develop quarries.

The company had issued RM100 million worth of Islamic bonds in 2006 to bolster its financial position.

Locally, it plans to lease or acquire quarries in areas where it does not have a presence yet. These include Johor, Sabah and Sarawak. It hoped to supply its building materials to builders within Johor’s Iskandar Development Region while quarries in Sabah would focus on township developments in Kota Kinabalu. He did not elaborate on Sarawak.

Financial Results …

The first quarter to March 31, 2008 saw Minetech’s net profit rising significantly to RM2.2 million or 73 sen a share from RM16,000 or one sen a share a year earlier, helped by higher premix sales, besides the company’s ability to pass on its fuel cost for the production of aggregates to buyers. Revenue, meanwhile, surged 38.8% to RM43.14 million.