• Follow Us On Our Preferred Social Media Platform:

Malaysia: Techfast starts oil trading unit, unveils bunker supplier ambition with proposed CCK Petroleum acquisition

26 Feb 2021

Malaysia-listed investment holding company Techfast Holdings Bhd is planning to enter the local bunkering sector with its newly established petroleum trading subsidiary Fast Energy Sdn Bhd (FESB), learns Singapore bunkering publication Manifold Times.

FESB, first starting out as a trading unit, is currently exploring collaboration opportunities with a major Malaysian bunker supply firm operating at Port Klang, states Techfast Executive Director Vincent Tan.

“Despite the pandemic, marine traffic remains high at Port Klang. We will be positioning FESB to capture a sizeable market share upon completion of the collaboration agreement with the local supplier,” he says.

Tan, meanwhile, notes Techfast’s foray into the bunkering sector will be boosted by a proposed 35% acquisition of local bunker trading firm CCK Petroleum Sdn Bhd – which is currently pending shareholders’ approval.

He is certain Techfast’s strong cash flow position will be able to support CCK Petroleum in capturing a bigger market share within the Malaysian bunkering sector.

“CCK Petroleum has been in the bunker industry for the past 10 years,” explains Tan.

“With its experience and network at all 13 major ports in Malaysia, the acquisition of CCK could elevate Techfast’s aim to be a prominent bunker supplier in Malaysia.”

As a starting point, Tan points out Techfast will be expanding CCK Petroleum’s current trading network to include other international ports after the proposed acquisition to the board has been approved.

“Lately, there has been a squeeze in the supply of bunkers at Malaysian ports due to the implementation of new bunker tanker requirements [double hull, double bottom],” he shares.

“This means existing bunker suppliers and bunker tanker operators will now have to invest in new vessels in order to meet the requirement to legitimately perform marine refuelling operations within Malaysian waters.

“For Techfast, we are happy to consider investments into new bunker tankers to capture market share.”

According to Tan, Techfast has been principally engaged in the production of self-clinching fasteners, electronic hardware and precision turned parts; it also produces mould cleaning rubber sheets and LED epoxy encapsulant materials.

The latest venture into the Malaysian bunkering and petroleum trading business now allows the company to diversify its earnings base and reduce exposure from the manufacturing business segment.

“Disruption caused by the current coronavirus pandemic has resulted in Techfast looking at new revenue streams for a diversified business portfolio,” says Tan.

“This is where the marine fuels sector comes in. The shipping industry is now in the midst of exciting times where it is entering an energy transition from traditional oil-based fuels to cleaner alternative energy sources due to the upcoming IMO 2030/2050 regulation.

“To explain, the International Maritime Organisation (IMO)’s initial GHG strategy aims to achieve a reduction of at least 40% by 2030 and 70% by 2050 [compared to 2008] for CO2 emissions per transport work in international shipping.

“As such, newbuilds, especially the larger vessels, are now opting for dual fuelled engines which can be powered by liquefied natural gas.

“This once in a lifetime change also provides an opportunity for Techfast to consider the possibility of venturing into the LNG bunkering sphere; after first establishing the bunkering business for traditional oil-based fuels.

“Moving forward, we are cautiously optimistic of the future prospects of CCK and the enlarged Techfast Group.”

Related: Malaysia: Techfast Holdings acquires 35% stake in bunker trading firm CCK Petroleum

 

Photo credit: Techfast Holdings
Published: 26 February, 2021

Related News

Featured News

Our Industry Partners

  • argus

PR Newswire