Listed Companies' Announcement
FEDERAL INTERNATIONAL (2000) LTD
PRESS RELEASE - FEDERAL ENTERS INTO JOINT VENTURE TO TAP THE AUSTRALIAN FLOW CONTROL MARKET.
Singapore, June 20, 2003 – SGX Mainboard-listed Federal International (2000) Ltd ("Federal" or "the Federal Group") today announced that it has entered into a 50/50 joint venture with JK Far East Pte Ltd as part of its effort to enter the flow control market in Australia, specifically targeting the multinational corporations, EPC (engineering, procurement and commission) and skid packages. Australia is a new market for Federal and the move is in line with the Group's strategic global expansion.
JK Far East Pte Ltd is owned by Mr James E. Keamy whose family-owned-and-run company, Keamy Engineering Australia Pty Ltd, has more than 30 years' experience in the flow control industry which includes valve manufacturing, refurbishment, repair & testing to site inspection and service. Keamy Engineering Australia Pty Ltd has solid experience servicing the major multinational companies in oil & gas, petrochemical, power generation, mining and resources companies. Some of its major clients include Santos Ltd, Apache, Woodside, Chevron Texaco and other multinational companies.
The joint venture company, Federal International (Aust) Pte. Ltd. ("Federal Australia") will operate through its wholly owned subsidiary F.I (Aust) Pty Ltd to be located in Melbourne. It is also planning to set up offices in Perth and Queensland. Federal Australia will have a paid-up capital of S$200,000.
F.I (Aust) Pty Ltd will offer major end users and project clients not only cost effective brand-name flow control products, but also services through alliances with manufacturers, other companies in the Federal International group and engineering groups both within Australia and Asia. The company expects to be able to help its clients meet their diverse needs, ranging from "off the shelf" supply capability to total valve management programmes that include on- and off-site maintenance capability, specialty product manufacturing and real technical expertise tailored to the customer's needs.
Commented Mr K K Koh, Executive Chairman and CEO, "This joint venture company with J K Far East Pte Ltd will better position us to aggressively tap the growth potential of the Australian offshore oil and gas market, specifically for EPC and skid packages. With this strategic alliance, we expect to be able to increase our global customer base and thus expand our global market presence."
He added, "We decided to enter the Australian market, after due deliberation and having recognized the role we can play in adding value to the Australian flow control market. There are many major projects scheduled to commence in late 2003 through to 2006 in the chemical, LNG, fertiliser and oil & gas sectors. Our entry into this market is timely as major Australian engineering contractors have become major players in undertaking EPC project work throughout Asia, and with our focus on core major clients, we believe we will achieve success."
Commenting on the joint venture company, Mr James E. Keamy, said: "We are delighted to be partners with the Federal Group which is an established player in the Asian oil and gas industry. Our investment in the Federal International (Aust) Pte. Ltd. was made with the goal of providing exceptional products and tailoring services for our current and future client base. F. I (Aust) Pty Ltd is a flow control distribution company that will approach the flow control industry in Australia with a difference. We believe that we will be able to drive future business growth and further potential investments in the flow control industry within Asia and Australia by Federal International (Aust) Pte. Ltd."
The above investment will be funded by internal resources and is not expected to have any material impact on the consolidated earnings per share and net tangible asset per share of the company for the current financial year.
None of the Directors or substantial shareholders of Federal has any interest, direct or indirect, in the above said transaction.
About Federal International (2000) Ltd
Federal is principally involved in the distribution of flowline control products (including valves, structural steel, steel flanges/ connectors and pipe fittings) to the oil and gas, power, chemical and pharmaceutical industries. By moving upstream into the design and manufacture of specialised valves and related products, Federal aims to be an integrated service provider and procurement specialist in the energy and infrastructure industries offering a complete one-stop service package.
For the financial year ended December 31, 2002, Federal posted a strong net profit of S$2.4 million on a turnover of S$96.1 million.
About Keamy Engineering Australia Pty Ltd
With more than 30 years' experience in the flow control industry in Australia, Keamy Engineering Australia Pty Ltd is the authorized repair facility for many major global manufacturers. It has one of the most complete engineering facilities in Southeast Asia for refurbishment and repair of flow control equipment and for quick delivery on specialist manufactured flow control products.
About J K Far East Pte Ltd
This is a privately owned investment company.
For further information, please contact:
Ms Tham Moon Yee/Gwen W Ling
Stratagem Consultants Pte Ltd
Submitted by Chng Geok, Company Secretary on 20/06/2003 to the SGX