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BUNKER INDEX :: Price Index, News and Directory Information for the Marine Fuel Industry
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Malaysian supplier expects 90% of future business to come from bunkering

11 Sep 2017 10:56 GMT

New MD of Straits Inter Logistics says 'the contribution from bunkering will significantly increase'.



The new managing director of Straits Inter Logistics Bhd, Dato Sri Ho Kam Choy, expects the company to achieve growth in sales of marine fuel and for bunkering to make up around 90 percent of the company's business in the near future following the recent addition of two supply vessels, local media outlet The Star reports.

Ho recently replaced Dato Tan Seng Hu at the end of August as managing director of the company, and has a plan in place to drive bunkering growth during his tenure.

The Malaysian firm, formerly known as Raya International Bhd, has posted a profit during the last two quarters and hopes to achieve a turnaround in its full-year results following last year's drop in profit before tax to MYR 143,282 (approx. $34,000) from MYR 284,888 (approx. $68,000) in 2015.

In the second quarter of 2017, Straits recorded a net profit of MYR 623,000 with revenue of MYR 26.81 million.

Cumulative net profit for the first half of the year, meanwhile, was MYR 1.17 million.

Ho aims to position Straits as a premium supplier of marine gas oil (MGO), targeted towards larger and newer ocean-going vessels; he points out that "diluted versions of fuel will in fact degrade the vessels".

Commenting on the Malaysian bunker market, Ho said the sector was "bustling" and noted that Straits is one of the few licensed bunker suppliers in the country.

"With the amount of activity taking place in the ports, within port limits and anchorage, the question is how to fulfil all that demand," Ho is cited as saying.

Straits' subsidiary Selatan Bunker (M) Sdn Bhd was launched in 2015. The company, which principally operates at the port of Pasir Gudang, commenced oil trading and bunkering via a collaboration agreement with Tumpuan Megah Development Sdn Bhd. Last year, on September 5, the company obtained its Petroleum Development Act Licence from the Ministry of Domestic Trade, Cooperative and Consumerism, which effectively gave the company the go-ahead to start its bunker supply business.

Less than three months later, on November 14, Straits entered into an agreement with Sturgeon Asia Ltd and Straits Holdings Ltd - two companies in which Ho is also a director and shareholder.

Straits acquired two bunkering vessels - Sturgeon 1 and Straits 1 - from the two firms, and also raised MYR 21.15 million in a rights issue, of which MYR 2.8 million was used to acquire the Straits 1.

Ho conservatively estimates that the vessels will be carrying and refuelling a total of approximately 8,000 tonnes per month, which works out at around 96,000 tonnes per year.

"These vessels will be contributing earnings to Straits from the fourth quarter of this year. Following this, the contribution from bunkering will significantly increase," remarked Ho.






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