MMM aims to become integrated shipping firm

News was prepared under the information support of Online Daily Newspaper on Hellenic and international Shipping "Hellenic Shipping News".

30 Oct 2007

MALAYSIAN Merchant Marine Bhd (MMM), which will have a new major shareholder Core Attributes (M) Sdn Bhd, has unveiled plans to become a fully integrated shipping company by 2010. Newly appointed non-executive director Datuk Ramesh Rajaratnam said it would venture into oil and gas (O&G) offshore vessels services, dockyard, floating production storage and offloading (FPSO), tugs and barges, and dredging businesses. ''All O&G ancillary services is enjoying buoyant business as oil price increases,'' he said in an interview on Saturday.  He said the oil price, currently at about US$90 per barrel, might escalate to US$100 per barrel, where it would further spur the demand of O&G support services.  ''MMM is in preliminary talks with several local and foreign O&G support services vendors which are interested to acquire stake in the company.  ''This will not only be beneficial for MMM's expansion but can also help it secure new contracts,'' he said.  Ramesh added that MMM intended to acquire about a 20% to 25% stake in a foreign dockyard located in the region.  ''This is to cater for the expansion of our fleet as many shipyards are fully booked. It will take three to four years to build a new vessel, and if we have our own dockyard, our needs will be prioritised. ''In addition, MMM will gain profit from the booming business of shipbuilding,'' he said. He added that the dockyard the company was interested in had recorded about US$73mil in turnover. Ramesh said the company was also looking into the dredging business as corporations worldwide started to realise the importance of safeguarding the environment via cleaning of rivers and deltas. ''MMM is also attracted to acquire FPSO units as well as tugs and barges,'' he said. Ramesh added that MMM planned to expand its existing fleet of bulk carriers and chemical tankers. Presently, the company operates eight vessels. He said MMM would finance all these expansions through bank borrowings and private equities. ''I have been meeting investors in Hong Kong and Singapore where they have shown keen interest,'' he said. He was also confident that MMM would return to the black in the current fiscal year ending Aug 31, 2008. Core Attributes will buy a 28.67% stake in MMM from M3nergy Bhd for under RM50mil. The corporate exercise will be completed in a week. ''Core Attributes is not a dormant company as many had speculated,'' Ramesh said. ''It was established seven years ago and has interest in property development, telecommunications and now, shipping.''