KUALA LUMPUR (26 May): Pipe manufacturer Engtex Group Bhd has bagged an RM25 million contract from Syarikat Bekalan Air Selangor Sdn Bhd (Syabas) to supply Ductile Iron (DI) pipes as part as Selangor’s water pipe replacement programme.

In a statement today, Engtex group managing director Datuk Ng Hook said that the contract was a positive step in the state’s initiatives to replace ageing and leaking pipes in the water distribution system.

He said statistics from National Water Services Commission (SPAN) state up to 1.5 billion litres of water was lost daily in Selangor in 2014, recording non-revenue water (NRW) at levels up to 33.6% in the highly-industrialised state.

Ng added that the group intends to invest approximately RM15 million in capital expenditure (capex) in order to enhance its competitive edge in view of higher anticipated demand in the future.

He said the capex would be for new machinery to increase the DI pipe diameter from current 800 mm to 1,200 mm, as well as to expand its mild steel (MS) pipe production capacity from 42,000 metric tonnes (mt) to 66,000 mt per annum.

Combined with the RM25 million contract, Engtex’s outstanding orderbook amounts to RM109 million. In addition, the group is tendering for projects worth about RM507 million both from the public and private sector.

It is estimated that it would take approximately 20 years to completely replace the 44,000 km of old pipes nationwide.

“The investment is timely to upgrade our capabilities and supply wider range of products in line with potential market requirements,” concluded Ng.

At the company’s AGM today, shareholders approved a final single-tier dividend of 0.75 sen per share in respect of financial year ended 31 December 2015 (FY15), which will be paid out to shareholders on 1 July 2016.

As of noon-break today, Engtex’s shares were up 2 sen to RM1.17 with a total volume of 440,700 shares being traded.