ICP busy with 9MP projects, says MD

By C.S. TAN

PETALING JAYA: Industrial Concrete Products Bhd (ICP) has started supplying to projects under the Ninth Malaysia Plan (9MP), which led it to post a record volume of over one million tonnes of concrete piles during its financial year ended March 31, 2007.  

Managing director Mah Teck Oon was brimming with excitement as the company was getting a lot of 9MP projects.  

“All our plants are very busy and operating at almost full capacity,” he told StarBiz recently.  

Mah said that in the six months ended Sept 30, 2006, demand was led by the private sector, but in the second half, demand was stronger from the Government sector. 

Mah Teck Oon says all the company's plants are very busy and operating at almost full capacity.

The demand came from small and medium projects such as apartments for the police, fire brigade and small bridges. Mah believed these were projects that were implemented under the 9MP. 

The media did not report the implementation of these small projects as it is focused on the mega projects. When the mega projects come on-stream, that would be the icing on the cake for ICP, a subsidiary of IJM Corp Bhd.  

ICP recently reported a 68% surge in net profit to RM17.6mil for its fourth quarter ended March 31, and RM59.2mil for the full year.  

The fourth quarter is seasonally the slowest due to the Chinese New Year holidays but it turned out to be the strongest quarter of the financial year just ended. 

“We had the orders in hand. It was a matter of pushing production,” Mah said.  

In anticipation of the firm results, ICP's share price has quietly climbed 76% to RM3.08 from RM1.75 at the start of the year.  

The company's market value topped RM1bil early this year, an event that also enthused management.  

The company is conscious of producing value for shareholders. It watches, for instance, the efficiency in its use of capital. ICP achieved a return on equity (ROE) of over 18% in the last financial year, and with brokers forecasting an earnings expansion of about 30% this year, ROE would go above 20%.  

ICP has eight plants that produce piles for the foundations of buildings, bridges and jetties. One of these is in Seberang Prai, which is strategically situated to bid to supply piles for the second Penang bridge. 

Mah estimated the proposed bridge would require about 300,000 tonnes of spun piles, which is the type that ICP produces. This estimate was based on the span of the bridge over water, as reported in the media. 

Other large projects in the north that the company could bid for include the proposed monorail and Penang Outer Ring Road.  

The company also has two plants in Lumut, Perak, and that could supply piles for the proposed RM3bil West Coast Expressway, especially if IJM takes on a construction role in that highway project.  

In addition, ICP has a plant in Terengganu that would be well placed if the ports there expand. IJM itself has interest in Kuantan and Kemaman ports after it took over the assets of the Road Builder group.  

There are only two manufacturers of pre-tensioned spun concrete piles in the country, with ICP being the larger one and the other being Concrete Engineering Products Bhd.  

The domestic market is large enough for both of them.  

“The market looks very good for the next few years,” said Mah. Beyond that, the group could increase its exports and plant up facilities in regional countries. 

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