KUALA LUMPUR (Oct 21): Kumpulan Perangsang Selangor Bhd's (KPS) 51%-owned subsidiary Aqua-Flo Sdn Bhd has clinched an RM91.6 million contract from Pengurusan Air Selangor Sdn Bhd (Air Selangor) to supply water chemicals to water treatment locations specified by Air Selangor or its subsidiary and associated companies.

The contract will run for 14 months from Nov 1, 2021 to Dec 31, 2022, KPS said in a statement on Thursday.

“The contract, which was secured via an open tender, bears an option for extension upon the request by Air Selangor.

“It is expected to contribute positively to KPS' net assets and earnings for financial years ending Dec 31, 2021 and 2022,” it added.

KPS managing director and group chief executive officer Ahmad Fariz Hassan said the group is excited to continue to build on the strong business relationships with Air Selangor, and is committed to providing long-term solutions and sustainable growth of the water industry.

“The business aspect notwithstanding, winning this contract is instrumental in executing the group’s overarching sustainability agenda.

“We take serious consideration to embed, be it directly or indirectly, a significant environmental aim into our business strategy and objective of ensuring the availability and sustainable management of water. This strategy execution is in line with one of the United Nations Sustainable Development Goals,” he said.

From a commercial perspective, Ahmad Fariz said the increasing demand for chemicals by the largest water operator in Malaysia displays Air Selangor’s confidence in Aqua-Flo playing an important role in ensuring the sustainability of clean and safe water supply in Selangor.

“Backed by our consistent track record in providing quality products at competitive prices,the new contract cements further Aqua-Flo’s status as one of the market leaders in the supply of water treatment chemicals in the country,” he said.

On Aqua-Flo’s business prospects in the immediate term, Ahmad Fariz said this contract builds on the company’s ambition to steadily grow market share in the potable water business, leveraging on the expected increase in water treatment plant capacity in meeting the rising demand for safe and reliable treated water.

“Before this, Aqua-Flo had won a two-year contract worth approximately RM162.5 million from Air Selangor from Nov 1, 2018 till Oct 31, 2020, which was extended for 12 months until Oct 31, 2021 for an additional RM81.2 million.

“Moving forward, we expect organic growth in Aqua-Flo’s order book as it continues to strengthen the traction in its chemical sales, as well as increase revenue from the water meter and equipment business segments from the existing and new customers,” he said.

KPS shares closed at 0.65% or half a sen higher at 78 sen, valuing the group at RM419.16 million.