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,High order: A Favelle Favco crane in action. The cash-rich crane builder bagged RM121mil worth of new orders, from eight customers, in the months of June to July.

AS the oil and gas (O&G) industry gets back on its feet, contracts are being dished out and Favelle Favco Bhd is seeing a steady flow coming its way.

The cash-rich crane builder bagged RM121mil worth of new orders, from eight customers, in the months of June to July.

These jobs are to be delivered by between the end of this year and the third quarter of 2022 and are expected to contribute positively to its earnings for the financial year ending Dec 31, 2021 (FY21) and beyond.

These new job wins have brought Favelle Favco’s new orders to-date to RM222mil – a positive indication that the O&G space is seeing a recovery on the strength of the oil price, say analysts.

They note that at least five out of the eight contracts won by the company are for offshore activities, including the compressor system and upgrade work undertaken by its subsidiary Exact Automation Sdn Bhd.

Maybank Investment Bank Research believes that Favelle Favco, whose order book now stands at about RM637mil, potentially stands to win more contracts in the second half of the year. It estimates that Favelle Favco has an order backlog of RM500mil to RM600mil in FY21-FY22.Favelle Favco's MD Mac Chung Hui

Favelle Favco’s managing director and chief executive officer Mac Chung Hui is hopeful that with the ongoing vaccine rollout, prospects will eventually recover for O&G, as well as the construction sector.

“The pandemic years of 2020 and 2021 have been challenging with supply disruptions and ad-hoc changes in working hours due to the various lockdowns around the world. There is still a lot of wait-and-see in the market and orders are pending for more visibility,” he tells StarBizWeek.Vigilant of the “new realities”, he says the group has continued to innovate to ready itself for post-pandemic growth.

“We will be delivering several new models in the next one year.

“These include a new large heavy lift crane, which is the PC800 for offshore wind turbine work. We will also introduce a new tower crane concept into Malaysia and a new tower crane accessory for the United States market,” he explains, adding that these innovations will drive the group’s business moving forward.

Recalling the past year following the Covid-19 outbreak, Mac says one of the biggest challenges the company faced was the impact it had on the way the group has always done business.

This prompted “a deep review of how we operate to get a good understanding of what will tick and what our customers want post-pandemic”.


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