TECHFAST VENTURES INTO PETROLEUM TRADING, OIL BUNKERING BIZ

KUALA LUMPUR, March 2 -- Components manufacturing group, Techfast Holdings Bhd is proposing to diversify into the trading of petroleum products, oil bunkering and other related businesses.

Executive director Vincent Tan Wye Chuan said the business diversification will reduce the company’s sole reliance on its existing manufacturing business.

"We have big plans to grow this business as we aim to become a leading bunker supplier in Malaysia.

"A new subsidiary, Fast Energy Sdn Bhd (FESB) has been established to undertake the provision of bunkering services, vessel chartering and other related activities," he said in a statement today.

In addition, Techfast is bidding for contracts to boost its order book and exploring earnings-accretive opportunities via strategic partnerships or merger and acquisition (M&A).

Tan said Techfast is in the midst of acquiring a 35 per cent stake in CCK Petroleum Sdn Bhd for RM26.25 million via a combination of cash and issuance of new shares.

CCK Petroleum was established in 2013 and is principally involved in the trading of bunker oil and provision of oil bunkering services related to trading of marine fuels to ships, as well as other ocean faring vessels.

"Apart from that, we are also engaging fleet operators as well as companies in the shipping, transportation and logistics industry to secure medium to long-term contracts to ensure a sustainable income," Tan said, adding, Techfast is also in discussions with a major Malaysian bunker supply company operating in Port Klang.

He said the new business diversification will also allow Techfast to ride on the evolving maritime transport industry.

"There is now an energy shift in the industry from oil-based fuels to cleaner alternative energy sources due to the upcoming International Maritime Organisation 2030/2050 regulation, which aims to reduce the shipping industry’s emissions of greenhouse gases by at least 40 per cent by 2030 and 70 per cent by 2050.

"Due to this, newbuilds are opting for dual-fuelled engines that can be powered by liquefied natural gas. This presents an opportunity for Techfast to venture into the LNG bunkering space, after establishing a market for traditional oil-based fuels," he added.

Techfast will seek approval from its shareholders for the proposed acquisition and proposed diversification at a forthcoming extraordinary general meeting to be convened on March 11.

-- BERNAMA