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TH Heavy Engineering prepares for tough times ahead

TH Heavy Engineering prepares for tough times ahead
Keeping with the austerity theme in the Malaysian oil and gas industry, TH Heavy Engineering (THHE), has laid off more than one-third of its workforce due to a lack of new fabrication orders, and is bracing itself for tough times, local media reported.

We need to keep our level of operations very low until orders pick up," md and ceo Nor Badli Mohd Alias said.

THHE owns a fabrication yard in Pulau Indah, with a capacity of 10,000 tonnes per year. The yard’s utilisation rate is at 10%.“We are lucky that we have one ongoing fabrication project at our yard,’’ he said, adding that the ongoing topside fabrication project worth MYR250m ($68.5m)  will be completed in August.

The company is bidding for MYR2.1bn worth of projects locally and overseas that would include jobs in the Refinery and Petrochemicals Integrated Development project in Pengerang, Johor.

It is also looking for projects outside the oil and gas (O&G) industry. “For instance, we are looking at renewable energy plants such as biofuel,” Nor Badli said.THHE’s order book stands at MYR1.5bn, most of which comes from its floating production, storage and offloading (FPSO) contract.

Nor Badli said the company was converting its FPSO, which was bought two years ago, for a long-term charter contract with Japan’s JX Nippon Oil & Gas.

The contract entails THHE providing its FPSO facility to JX Nippon for the Layang O&G field, located off the coast of Sarawak, where earnings would start to contribute at end-June 2016.

Fellow Malaysian fabrication yard MMHE earlier this week also warned of tough conditions ahead.