MVE Technologies Banking On Petronas' VDP For Future Growth
MVE Technologies Sdn Bhd plans to grow under Petroliam Nasional Bhd (Petronas) Vendor Development Programme (VDP) so it will be able to compete with its peers within four years.
The choke and control valves supplier joined the VDP on December 2, 2014 after a six to seven months of stringent audit process to qualify for exclusive contracts for appointed scopes within the stipulated time period, in this case three years.
So, far the company has received orders for the supply of choke valves from Petronas Carigali Sdn Bhd and its project in Turkmenistan.
“Last year our revenue was about RM40 million. It has fallen by about 30% this year due to fewer projects but we are confident we would get more revenue next year than our revenue this year,” CEO Zullkarnain Jamri told media in Kuala Lumpur yesterday.
Petronas has announced up to 20% capital expenditure (capex) cut next year but Zullkarnain does not expect MVE which is involved in both upstream and downstream sector of the oil & gas (O&G) industry to be impacted by the capex cut.
"Our business strategy is not just capturing new projects, but on the replacement of existing units of choke valves and control valves.
So, we don't see any impact to revenue growth with the capex cut," he said adding that the replacement of choke valves cannot be deferred.
Zullkarnain owns 60% of the 100% Bumiputera company said that the choke valves are critical to reduce pressure and ensure that oil production are not disrupted.
“The price is dependent on the complexity of the design but ranges from RM25,000 to RM1.5 million each,” he said.
According to Zullkarnain, MVE’s competition in Malaysia are from three other companies, from the USA, Canada and Netherlands.
But, the three year exclusive contracts with Petronas ensures that only valves from MVE will be used in Production Sharing Contract (PSC) in Malaysia where Petronas is the operator.
In the fourth year MVE would have built up its reputation considerably enough to work with other PSCs operators such ExxonMobil, Talisman and Shell.
MVE’s VDP is for choke and control valves but Zullkarnain said the company has also two other patented products it will launch in February 2015.
“The products are non rubbing ball valve and lift plug valve and customer could save up to 40% with the ball valve,” said Zullkarnain.
Petronas implemented its VDP in 1993 and appointed its first vendor in April 1994.
The objective of VDP is to assist in the development and monitoring of Bumiputera vendors for manufacturing products and providing services to the O&G industry.
Currently there are close to 90 companies under VDP including a subsidiary of a public listed company.
According to Petronas, most of its VDP vendors have successfully grown their business and moved on to become independent and able to compete with their peers in bidding for jobs or contracts in the industry.
Credit : http://themalaysianreserve.com/new/story/mve-technologies-banking-petronas-vdp-future-growth