KUALA LUMPUR: Muhibbah Engineering (M) Bhd is exploring opportunities to participate in the transportation of natural gas for the power plants in Indonesia.

Speaking to reporters after the group and its 59.2%-owned Favelle Favco Bhd’s annual general meetings yesterday, Muhibbah’s managing director Mac Ngan Boon said Muhibbah wants to broaden its earnings base through recurring income.

“The company is looking into other areas where we think there is potential. Our focus will be on the [Asean] region, we are quite open-minded. Like Indonesia, for example, we are talking to one of the IPPs (independent power producers), which want to use gas to run its power business, so they got us to look at building some facilities to do regasification and so on,” he said.

Mac said the discussion mainly revolved around the logistics of natural gas to power plants, including gas transportation into smaller islands in the country.

“We got our experience from [the] Regas Terminal (Sg Udang) Sdn Bhd job in Melaka, which is our reference point. So these are things that we are working [on], it is very initial, these are all market development. They see us as a potential viable partner,” he said.

Regas Terminal is a wholly-owned subsidiary of Petronas Gas Bhd.

On Muhibbah’s existing businesses, Mac expects the domestic construction market to remain competitive moving forward.

“Domestic side, we don’t see much growth as compared to the region. I just give you a perspective and you draw the conclusion for East Coast Rail Link (ECRL). There are over 1,000 companies [which] registered their interest, so it is very competitive. We registered, so we are only one of the 1,000.

“To me, we would like to be involved [in ECRL] if we can get a decent margin. We are not going to do a cut throat [business] and involve ourselves for the sake of just being involved,” he said.

On the group’s Cambodian airports concession, Mac is optimistic that traffic growth will remain at double digits in 2019.

“The latest development in Sihanoukville, where they are opening up the city to gaming investment, we see a lot of potential in the airport there. They are trying to replicate Macau, so recently a lot of licences [have been] issued,” he said.

With regards to Favelle Favco, Mac, who is an executive director in the crane builder, said the market has saturated, and demand for crane ownership is shifting towards outsourcing crane services.

Therefore, Mac said the group will increase its fleet for the crane rental market, while expanding Favelle Favco’s newly-acquired intelligence automation business.

“Our intelligence automation business focuses very much on the oil and gas sector, so we are looking at whether we can expand it into other sectors globally,” he said.

“People don’t understand why Favelle Favco, a crane company, is going into automation businesses. What they don’t see is the management’s [view] that singular products are very cyclical. As a producer of just crane, it is up and down, so the idea is to broaden the earning base — if one sector is down, hopefully the other sector maintains,” he said.

Mac also said diversifying the group’s income is increasingly important due to growing uncertainties in the global economy.

“The market is very uncertain, I cannot tell you whether I am optimistic, neither can I tell you I am pessimistic, but I am very cautious, in the sense that I cannot predict, because the world has become too uncertain,” he said.