Construction and property development company Naim Holdings Bhd made headlines last year when it won the RM2.4 billion Sabah Oil and Gas Terminal (SOGT) project, together with its joint venture partner Samsung Engineering Co Ltd. The SOGT will serve as a hub for crude oil and natural gas processing from the oilfields offshore Sabah.

Although the contract boosted Naim’s order book by 70.8% to RM1.76 billion at the time, investors were somewhat muted in their response. OSK Research attributed this to the fact that it had a few concerns regarding Naim’s ability to execute the project. After all, Naim’s expertise lay in property development. This was a significant departure and the research house was not sure the company had the wherewithal to carry it off. The report drew some comfort from the presence of the joint venture partner. After all, South Korea-based Samsung Engineering Co had significant experience in refineries, petrochemical plants and LNG plants.

OSK analyst Jeremy Goh pointed out that Naim’s role would centre on the SOGT’s support infrastructure such as roads, bridges, earthworks and site offices, all of which were well within its comfort zone.

Naim Holdings is a Class A bumiputera contractor with ISO 9001 certification specialising in construction and development projects. The company was formed in 1993 and was listed on the Main Board of Bursa Malaysia in September 2003 as Naim Cendera Holdings Bhd. Two years ago, it changed its name to Naim Holdings Bhd and became the largest bumiputera contractor listed on Bursa Malaysia. So far, it has won more than RM1 billion of federal and state government contracts and has a construction order book worth over RM3.2 billion.

Naim Cendera was set up in 1995 and ventured into construction when it secured a contract to build low-cost houses for the Sarawak Housing and Development Commission. From low-cost houses, it went on to build the Pujut 7 bridge across the Miri River in 1997. Two years later Naim did its first project in Kuching, when it teamed up with Custodev Sdn Bhd to develop Desa Ilmu in Kota Samarahan.

In 2007, Naim embarked on Riveria, a fast-developing residential precinct. In May this year, it launched the seventh phase of this project. Taken in total, Naim has developed residential and commercial units valued at more than RM2 billion throughout Sarawak. Through the years, the company has accumulated a landbank of 1,023ha with a gross development value (GDV) of RM8.3 billion.

How did it venture into oil and gas?

In 2007, Naim Cendera forked out RM87.75 million cash for a 45% stake in Dayang Enterprise Sdn Bhd, DESB Marine Services Sdn Bhd and Fortune Triumph Sdn Bhdh. The Dayang group of companies had been profitable since 2002 and were heavily into O&G. In fact its core businesses were in the maintenance of offshore topside structures, pipes and valves, electrical and instrumentation, fabrication as well as hook-up and commissioning services for the O&G industry.

It owned two marine vessels and one supply ship, chartered vessels to provide floating accommodation and catering services as well as rented equipment and machinery to oil companies. Dayang’s major customers were Sarawak and Sabah Shell, Petronas Carigali and ExxonMobil.

The partnership between the two was to enable Dayang Enterprise to do bigger things within the sector. During the press conference to announce it, Dayang Enterprise managing director James Ling Suk Kiong said the company planned to venture into onshore fabrication and offshore marine engineering jobs.

A year later, it trimmed its holdings in Dayang Enterprise Holdings Bhd from 45% to 34%, as part of the restructuring exercise leading up to the listing of Dayang on the Main Board of Bursa Malaysia.

Moving forward, Naim is banking on Sarawak’s potential for land development. The company is looking to firm up three land deals that include Batu Lintang, Samalaju and an integrated development within the 36-acre old Bintulu airport with an estimated GDV of RM1.5 billion. Batu Lintang is 13ha of prime land with an estimated GDV RM1.5 billion within the Kuching city centre.

Sarawak’s growth corridor will generate potential business in plantation, energy and construction. Kenanga Investment Bank Research pointed out in a report last year that Naim is the prime beneficiary of pump priming for the Sarawak Corridor of Renewable Energy (SCORE), including potential infrastructure investments, and is in line to secure major projects. “FDI will eventually draw new population growth into Sarawak, benefitting its property development division,” the report concluded.

This article appeared in The Edge Financial Daily, September 15, 2011.