Extracted from Annual Report 2023
Engineering & Construction Division
Operation Review
During the year under review, the Engineering & Construction Division secured a contract for a 10.44 MW small hydro power plant at the Sungai Selangor Dam in Kuala Kubu Baru, Selangor valued at RM65 million from AIS Small Hydro Sdn Bhd (“AIS Small Hydro”). This is the Company’s first small hydro power plant project, an addition to our overall renewable energy portfolio which also include solar power. The award of the project reflects the strong confidence that AIS Small Hydro has in Salcon and we look forward to further expanding our portfolio of renewable energy projects in the near future.
Besides this, the division has also successfully secured a RM20.66 million sewer reticulation project in Seberang Perai, Penang which was awarded by Jurutera MTC Sdn Bhd for Messrs Eco Horizon Sdn Bhd. In February 2024, the division secured a sewerage contract from Penang Development Corporation (“PDC”) for the design, construction and upgrading of sewer pipelines and related works in Batu Kawan Industrial Park, Penang valued at RM19.68 million.
In FY2023, the division has also successfully completed several major projects as below:
1. Langat 2 Package 15 (4), Pipeworks
2. Sewage Treatment Plant STP2A (Module 3 – 50,000 PE with Ultimate Capacity 200,000 PE) at Mukim Kapar
3. Rehabilitation Works of Vacuum Sewerage System at Bandar and Ambang Botanic, Klang, Selangor
The major on-going projects under this division are as below:
Water engineering:
1. Upgrading of Telibong II Water Treatment Plant – Raw Water Intake and Water Treatment Plant Works
2. Provision of EPCC for 10.44 MW Small Hydro Power Plant @ Sg. Selangor Dam, Selangor
3. Package 3: Design & Build Dewatered Residual Disposal System for Langat 2 WTP
4. Customer Call Centre, Monitoring & Maintaining DMZ, Meter Reading and Billing for Sandakan Water Department
Wastewater engineering:
1. Proposed External Main Sewer Reticulation Works to STP5 on Lot 21145, Mukim 13, Bandar Cassia, Batu Kawan, Daerah Seberang Perai Selatan, Pulau Pinang
2. External Common Gravity Sewer Mains, Jalan Segambut, Kuala Lumpur
3. External Sewerage and Drainage Works, Mukim Kuala Lumpur
4. Existing STP (GUS116) and M&E Works for NPS (module 2) for Cadangan Pembangunan at Taman Bunga Raya, Mukim Serendah, Selangor
5. Sewer Pipelines and related works at Batu Kawan Industrial Park, Seberang Perai Selatan, Pulau Pinang
Outlook
Our current total tendered/pre-qualified projects are valued at RM1.2 billion as at 31 December 2023, for both local and overseas project whilst the outstanding orderbook stands at RM308.3 million, with 61% from the water unit, 18%, 1% and 20% from wastewater, NRW and other units respectively.
Moving forward, the division stands ready to tackle challenges and leverage on opportunities in the water and wastewater industry. With a robust portfolio spanning five decades and a proven track record of completing 1,050 projects, including the design, finance, construction, operation, and maintenance of water and wastewater treatment plants, we are strategically positioned to capitalize on emerging opportunities both within Malaysia and internationally.
Glove Manufacturing Division
Operation Review
Amid heightened market competition following the post-pandemic period, and slower global post-pandemic demand, the division reported a total production of 124,756,632 million pieces of gloves and successfully introduced 5 new products, catering to diverse market needs and demands. The new products launched in 2023 include Ultra thick Dual Black latex with pink inner, Ultra thick Dual Black latex with green inner, Ultra thick dual brown latex with brown inner, Ultra thick dual black latex with purple inner, Un-lined household latex gloves and 400mm Decontamination dual layered examination gloves.
The division obtained new certifications, including the Good Manufacturing Process (“GMP”) certification and EU Type Examination Certificate (PPE III), which underscores our dedication to upholding the highest standards of quality and compliance in glove manufacturing.
Throughout the year, the division actively participated in prominent exhibitions such as ARAB HEALTH 2023, Chennai Medicall 2023, and A+A Germany, among others. These events provided valuable opportunities to showcase our products, interact with potential customers, and strengthen relationships with existing clients.
To enhance energy conservation efforts, the division successfully converted the existing gas to biomass boiler with the approval of JKKP/DOSH. The 16 tonnes biomass plant efficiently generates the required 10 tons of steam, which adequately serves all four production lines, resulting in smoother operations and heightened efficiency.
Outlook
The demand-supply dynamics within the rubber glove industry is projected to move closer to equilibrium. As a result, the division holds an optimistic outlook, expecting the oversupply condition in the rubber glove sector to alleviate gradually. The division will aggressively capitalize on opportunities and overcome challenges by adopting a proactive and strategic approach.
Technology Services Division
Operation Review
During the year under review, VBT successfully delivered 6 new cell sites and upgraded the bandwidth for 24 existing cell sites along the LRT corridor for its clients which include Maxis, CelcomDigi Berhad, TM Technology and Digital Nasional Berhad (“DNB”), resulting in an increase in site rental income and bandwidth charges.
Through its Enterprise Business services, VBT secured contracts from 2 new customers i.e. MN Permai NetCom Sdn Bhd and AIMS Data Centre Sdn Bhd. Together with the existing customers - ViewQwest Digital Sdn Bhd, YTL Communication Sdn Bhd, Excel Commerce Solutions Sdn Bhd, XMT Technologies Sdn Bhd and YTL Broadband Sdn Bhd, VBT has secured 12 new enterprise business sites and successfully delivered 9 sites in FY2023.
Outlook
In view of the growing demand for Over- The-Top (“OTT”) services and the fastdeveloping data center industry in the Klang Valley, VBT foresees significant business opportunities available in the market. Aside from that, with more open access infrastructure for Broadband Services needed by the service providers for the end-users, VBT anticipate fostering valuable partnerships with the telcos and contributing to the continued development of a robust digital ecosystem.
VBT will continue to focus on the strategic initiatives aimed at expanding and optimizing the metro ethernet services. The division will actively seek opportunities to provide Fixed Broadband Services through collaboration with Service Partners in both greenfield and brownfield areas.
Recognizing the potential beyond the Prasarana Right of Way (“ROW”) corridor, VBT is committed to expanding its services into new geographic areas in near term to cater to a broader customer base and contribute to the overall growth of our operations.
Transportation Division
Operation Review
In FY2023, Eco-Coach & Tours (M) Sdn. Bhd.’s (“ECT”) operated a fleet consisting of 193 vans, 30 coaches, 25 MPVs, 5 limousine and 18 Tour Buses to cater to its multinational companies’ clients such as Intel, Paramit, Analog Device, Kobelco, Celestica and Cruise Royal Caribbean.
ECT successfully launched its new fleet in June 2023 as part of the company’s strategic initiative and testament to reliable commuting services for its clients. During the year under review, ECT has also expanded its Senstrac FOCAS Passenger Transport and Tracking System (“Senstrac”) to other customers such as Celestica and Kobelco. Senstrac features enhanced safety through AI Dash Camera system, which provides of pictures of incidents at different angles. Notably, zero speeding cases were recorded since the system’s installation. As of now, a total of 225 vehicles have been equipped with the Senstrac system.
Under its industrial product logistic unit, Green Fleet Sdn. Bhd. (“GF”) operates 9 stainless steel and mild steel bulk tankers for clients in the palm oil and soy oil industries, including Soon Soon Oilmills Sdn. Bhd., PGEO Edible Oils Sdn. Bhd., Lam Soon Edible Oils Sdn. Bhd and United Malayan Bhd.
Outlook
Moving on, the division is committed to enhancing its operational efficiency and effectiveness. This involves improving the procurement system, diversifying parts sourcing and implementing driver’s incentives. Besides this, ECT will continue to leverage on digitalization in its transportation services to enable a more efficient and cost saving operational model.
Renewable Energy Division
Operation Review
During the year under review, the consortium where the Company has a 70% stake, was selected as a Solar Power Producer (“SPP”) to develop a 7 MW solar photovoltaic plant in Sungai Siput, Kuala Kangsar, Perak under the Corporate Green Power Programme (“CGPP”). This represents a significant milestone for the division as we further establish our presence and expand our portfolio in the renewable energy sector.
The division also strengthened its collaboration with HeveaBoard Berhad (“HeveaBoard”) by installing a solar PV system with a total capacity of 862.5 kW on the rooftops of HeveaBoard’s particleboard production facilities in Gemas, Negeri Sembilan, Malaysia on a build-own-operate basis for a duration of 25 years, with full operation expected in the first half of 2024. This marks the division’s second partnership with the HeveaBoard Group, following the development of 1.48 MW solar PV systems at HeveaPac premises, a subsidiary of HeveaBoard in 2021.
In FY2023, the Company generated a total of 2,806,683 kWh of solar energy including 2,018,306 kWh from rooftop solar PV system in Malaysia and 788,377 kWh in the UK. These efforts contributed to a total CO2 avoidance of 1,464.31 metric tons for 2023.
Outlook
The achievements and initiatives undertaken by the division in FY2023 have established a strong foundation for continued growth. We aim to further enhance our recurring income stream and portfolio through partnerships with like-minded organisations that share our commitment to reducing carbon emissions and promoting sustainable energy production and utilisation.
Property Development Division
Operation Review
The Group is currently in the midst of planning for the proposed multi phased mixed-use development project in Johor Bahru together with our joint venture partner, Exsim Kebun Teh Sdn Bhd. With the recent positive sentiments in the property market, Salcon hopes to unlock the value of the development land by leveraging on the track record and experience of our partner.
As for the land located in Belfield, the Group foresees high potential in the area with the near completion of the iconic Merdeka 118 tower. The Group will review a suitable development strategy which best fit the needs of the market.
Outlook
Despite the increase in home financing costs, the Group remains optimistic with the positive outlook on Malaysia’s property market in 2024, as the government introduces stamp duty exemptions and discounts for homebuyers.
The Group continues to seek land opportunities that aligns with our vision and objectives whilst navigating its operations with a focus on strategic collaborations and sustainable development.