VIVOCOM (0069) VIVOCOM INTL HOLDINGS BHD secures RM3.8b sand supply contract
KUALA LUMPUR (Feb 26): Vivocom Intl Holdings Bhd today announced a US$934.7 million (RM3.79 billion) sand contract awarded by the joint-venture contractor undertaking the main reclamation works for the Hong Kong International Airport Three Runway System project.
In a statement, the group said the three-year contract was clinched by V Development Group — which will soon merge with Vivocom — via its 97%-owned subsidiary Rain International Sdn Bhd.
Under the contract, Rain International is responsible for supplying sand to Zhen Hua Engineering Co Ltd-China Communications Construction Co Ltd-CCC Dredging (Group) Co Ltd (ZHEC-CCCC-CDC) joint venture.
Rain International is principally involved in the mineral trading and exportation business, supplying sand to its clients mainly in Hong Kong and mainland China for reclamation and construction works.
"As the appointed agent for the ZHEC-CCCC-CDC joint venture, we are looking forward to the exportation of sand from Malaysia to our client in Hong Kong to commence without any further delay," said Rain International director William Chan Ching-Kee.
Vivocom chief executive officer Datuk Seri Chia Kok Teong said the contract will be a "game changer" for the group and will contribute substantially to its earnings growth exponentially.
The sand would be procured from an approved permit holder to export sand overseas, and sourced from concession areas in Sandakan and Sungai Beluran in Sabah and throughout Malaysia, he said.
"While the contract starts with a three-year period, we are confident that the contract can easily be increased to five years and beyond, with higher tonnage shipped every six months. This could potentially generate revenue of up to RM6 billion to the company," said Chia.
Besides the reclamation works for the Hong Kong International Airport, the rapid pace of construction and reclamation works in China and Singapore also require heavy demand for sand, he noted.
Chia said Vivocom is working towards getting the group elevated to the Main Board of Bursa Malaysia and be a dividend-paying group soonest possible.
Vivocom shares were trading one sen or 0.94% lower at RM1.05 just before the close of trading, bringing the group a market capitalisation of RM600.87 million.