KUALA LUMPUR: Bintai Kinden Corp Bhd has formed a joint venture (JV) with Petro Flanges & Fittings Sdn Bhd (PFF) to supply materials and equipment to the local and international oil and gas (O&G) industry.
Bintai Kinden executive director Azri Azerai said the JV is well-positioned to ride the expected rise in demand for O&G equipment and materials from rising levels of activities to address the gap between supply and demand in the sector.
Azri said the recent energy crunch that arose from the Covid-19 pandemic and the global net-zero carbon transition has shown that O&G remains a critical component of the worldwide energy and manufacturing landscape.
“Bintai Kinden and PFF each bring the experience in our respective operations to tap into the industry upside and complement the existing earnings growth in the company,” he said
The two companies are setting up the JV, Bintai Energy Sdn Bhd (BESB), to capitalise on the expected O&G industry recovery as capital investments at home and abroad in response to the global energy and commodity crunch.
Bintai Kinden, via its unit, Kejuruteraan Bintai Kindenko Sdn Bhd (KBK), has entered into a special purpose vehicle and shareholder’s agreement (SPV agreement) with PFF for the strategic collaboration.
Under the agreement, KBK, which specialises in mechanical and electrical engineering services, will be responsible for managing BESB and providing the necessary funding for the venture.
“PFF will be handling the marketing work for BESB, tapping into its experience in the trading of flanges in oilfield industry plant, shipbuilding and water treatment industries.
“PFF had a record in supplying pipes, flanges, fittings, valves and other oil and gas equipment to end clients locally and abroad for an approximate aggregated order book value of more than RM60 million,” it said.
Having considered all the relevant aspects, including the rationale and effects of the SPV agreement, Bintai Kinden believes that the agreement is in the best interests of Bintai Group.
The SPV agreement will not affect the issued and paid-up share capital of Bintai Kinden but is expected to contribute positively towards the future earnings of the company.