Frontken Corporation Berhad 200401012517 (651020-T) • ANNUAL REPORT 2022 16 During the year, we expanded our O&G business footprint in Malaysia with the opening of our new facility in Pengerang, Johor to support the Petronas Refinery and Petrochemical Integrated Development (RAPID) and Pengerang Integrated Complex. Subsequently, we saw work orders flowing in and increased contribution from this new facility. We will continue with our selective capital investments, collaboration with strategic partners and adding supplementary technical capabilities such as mechanical seals and valves services and minor fabrication works. Our long-term plan is to maximise our new assets, participate in broader scope of works, and further expand human capital investment and capabilities to drive asset performance and revenue across our operating units. By leveraging on the Group’s engineering resources, optimisation, and partnerships with selective suppliers, we have successfully embarked on new opportunities and expedite deliveries of works. We will continue to develop strategic collaboration partners that supplement our inhouse capabilities, scope of services and products, and participate in broader work categories, new products, full reverse engineering works, and large CNC machining in Malaysia. Our aspiration is to be the most sought after, reliable and efficient one-stop service centre for O&G companies, covering all aspects of customers’ maintenance needs, EPCC and turnaround supports. Frontken Singapore (Plant 1), — During the year, we achieved a much-improved financial performance as a result of recovery of the O&G and petrochemical sector and the continual engagement in seeking new opportunities in different areas. Subsequently, we saw a big turnaround in the bottom line of this unit in that it has finally turned positive after many years of losses. Despite facing competitive pricing pressure, shortage of skilled labour and soaring electricity bills, we were able to overcome these hurdles by improving the utilisation of our resources and cross training our skilled employees to enhance production efficiency. The significantly lower cost base from operational changes made three years ago also helped to improve our earnings. We have seen increased activities for thermal spray process from our regular customers as well as contract manufacturers, an indication of more opportunities ahead. Activities for rotating equipment such as compressors, blowers, static component etc from petrochemical complexes in Jurong Island are also expected to increase with upcoming planned shutdowns as we see work orders coming in from our customers. CHAIRMAN’S MESSAGE (CONT’D)
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