Datuk Jessica Lo Vun Che (fourth from left), Datuk Johannes Lo Chaw Jack (sixth from left)
KUALA LUMPUR: Sabah-based major road infrastructure construction firm Azam Jaya Bhd plans to venture overseas, specifically into Kalimantan, Indonesia in the future.
Azam Jaya executive director Datuk Jessica Lo Vun Che said the group may also consider expanding into Sarawak should opportunities with good margins present themselves.
“We are not targeting Peninsular Malaysia at the moment because it is quite crowded with a lot of big boys. We are very humbled with where we are now and we will focus on Sabah for now,” she said at a press conference after the group’s Main Market listing ceremony yesterday.
Jessica added there is a lot more work for Azam Jaya to undertake in Sabah, not only with regards to the Pan Borneo Highway project packages but also rural road projects.
On this note, Azam Jaya alternate director and head of sustainability and innovation Datuk Johannes Lo Chaw Jack said the group is still waiting for the government to release more information on the tender for Phases 2 and 3 of the Pan Borneo Highway project.
“This is why we decided to go for a listing on the Main Market of Bursa Malaysia, in order to equip ourselves to get ready for the tendering stage,” he said.
As at Sept 20, 2024 the group had an outstanding order book of RM1.45bil, which is expected to be recognised for the financial year ending Dec 31, 2024 (FY24) to FY28.
Of the RM1.45bil, which comprises nine projects, four are Pan Borneo Highway-related projects. The total remaining revenue to be recognised from these four projects is about RM1.3bil.
“If we are not able to secure contracts for the other phases of the Pan Borneo Highway project, we will also target rural road projects in Sabah.
“There are thousands of km of rural roads that need to be upgraded, many of which are gravel roads now, while some are not even gravel roads,” Johannes said.
Azam Jaya raised RM61.5mil from the public issue of 78.8 million new shares. The company made its debut on the Main Market of Bursa Malaysia yesterday, opening at RM1 per share or 22 sen higher than its initial public offering (IPO) price of 78 sen per share.
The opening volume was 5.1 million shares. The stock closed its maiden trading day at RM1.09. The share price hit a high of RM1.16 and a low of RM1 in intraday trade.
The bulk of the proceeds raised or RM28.4mil is earmarked as working capital for the group’s construction projects
Another RM20mil will be used for the repayment of bank borrowings and RM8mil will go towards enhancing its construction capabilities. The remainder RM5.1mil will be used to defray estimated listing expenses.
As part of Azam Jaya’s growth strategies, Johannes said the group intends to reduce its reliance on subcontractors by expanding its existing fleet of construction machinery and equipment.
Currently, subcontractor costs comprise between 20% and 70% of Azam Jaya’s total construction cost of sales.
“There is no specific target on how much costs will be reduced because we are not saying that we are not going to rely on subcontractors.
“It depends on the projects and the accessibility to the location of the projects. If necessary, we may still outsource to subcontractors,” he said.
Johannes added there were certain tasks on-site that the company did not carry out, such as piling and turfing.
“It is not feasible for us to buy the machine and do piling because the volume of piling work that we have is not that much.
“One of the main reasons why we want to handle more work in-house is that we can have better control over the completion timelines of a project, whereas with subcontractors, I have to keep pushing them and sometimes they might not perform as well,” he said.
