KUALA LUMPUR (Sept 14): Straits Inter Logistics Bhd today signed a half year contract worth RM45 million to provide oil bunkering and related services.
 
The group said its 51%-owned subsidiary, Selatan Bunker (M) Sdn Bhd, inked the contract with Tumpuan Megah Development Sdn Bhd (TMD).
 
The two parties had previously inked a collaboration agreement to explore and develop the business of bunkering services for marine fuel, petroleum and petroleum-based products — including marketing and sales of bunkering services — in the Pasir Gudang Port area of Johor.
 
“We are pleased to be awarded this very first oil bunkering service contract, after we announced our business venture into this sector at the end of last year,” said Straits managing director Datuk Seri Ho Kam Choy in a statement today.
 
“We expect this business to eventually become the core business of Straits, and to replace the oil trading business that is currently contributing some 90% to our group revenue,” Ho added in the statement. 
 
The ACE Market-listed company, formerly known as Raya International Bhd, said the contract will last for six months, and will be funded via proceeds from its recently-completed rights issue and internally-generated funds.
 
The contract is expected to contribute positively to the earnings of the company for the year ended Dec 31, 2017, the statement added.
 
The group plans to commence its oil bunkering services by early fourth quarter of 2017, following the acquisition of its first two vessels.
 
Straits’ share price closed 1 sen or 2.08% higher at 25 sen today, for a market capitalisation of RM45.1 million.