KUALA LUMPUR: IJM Corp Bhd’s wholly-owned subsidiary, IJM Construction Sdn Bhd, has bagged a RM1.19 billion contract from Kuantan Port Consortium Sdn Bhd (KPC) to construct a new deepwater terminal in Kuantan Port, Pahang.

In a filing with Bursa Malaysia yesterday, IJM said it will take 36 months to complete the project. IJM’s wholly-owned subsidiary Road Builder (M) Holdings Bhd has a 62% stake in KPC, with the Government of Malaysia holding a special rights share.

According to IJM’s website, KPC was given a concession period of 30 years to operate Kuantan Port in 1998. With the development of the new terminal, IJM said it will sign a new privatisation agreement for 30 years, with an option to extend another 30 years.

The group added that it plans to expand the port to cater for ships up to 200,000 deadweight tonne, with an expected operation to commence as early as 2016.

IJM (fundamental: 1.6; valuation: 2.4) added that with the expansion, Kuantan Port is expected to increase its capacity throughput from 26 million tonnes to 56 million tonnes which could boost its annual container volume from 150,000 twenty-foot equivalent units (TEUs) to 1.5 million TEUs.

IJM shares ended four sen or 0.56% lower at RM7.10 yesterday, giving it a market capitalisation of RM10.63 billion.

This article first appeared in The Edge Financial Daily, on February 27, 2015.