Scable ... Aug11

The state government spending more on infra projects including electricity transmission will improve its earnings prospects.

The federal government is allocating rm5.7 billion under the National Key Result Areas to provide infra to the rural areas. Estimates that rm1.7 billion will be allocated for electricity projects in Sarawak.

Power cable makers SCABLE is one of the few companies with the capability to build transmission lines and substations in the SCORE.

The Bakun dam, which supplies 2400 MW of electricity, is the key selling point for the state government to market SCORE as an investment destination for foreign investors.

Since the dam is expected to be fully commissioned by mid 2013, there will be a lot of new transmission power lines and power stations being built in the state, This is also in anticipation of plans to electrify the rural areas.

One of the key electricity transmission projects in Sarawak is the 500kV Bunut-Kuching line, which will connect all the smaller transmission lines there.

SCB is part of a consortium bidding for the roughly rm2.5 billion job to build transmission lines and substations on the 600 km line. The consortium has reached the pre qualification stage and that the winner will be announced later 2011.

Phase 1 of the 500kV line is targeted for completion by March 2014. SCB will most likely get the lion’’s share of the first phase of the line from Busut to Sibu while the MNC will probably get a big portion in the second phase from Sibu to Kuching.

WCB has been growing its business via acquisitions. It had acquired Sarwaja Timur and Trenergy infra. The two acquisitions will be settled via the issue of new shares. The son of Chief Minister Tan Sri Abdul Taib, Datuk Seri Mahmud will emerge as the largest shareholders in SCB with a total direct and indirect equity stake of 42.11%. Sarawak Energy’s shareholding in SCB will be reduced to 19.19% while Leader Universal’s stake will shrink to 13.67%.

SCB hopes to tap the rural electrification scheme to improve electricity coverage in Sarawak. It sees a lot of potential jobs in this as RES is targeting to boost electricity coverage in East Malaysia to 95%.

With its existing cable manufacturing business, the acquisitions will turn SCB into a fully integrated outfit. The integration will improve its bargaining power when bidding for jobs.

SCB also tied up with ABB Malaysia to bid for projects.

The group is looking at exporting power to Brunei and Indonesia.