Serba Dinamik Annual Report 2016

2016 Annual Report 023 MANAGEMENT DISCUSSION AND ANALYSIS STATEMENT (Cont’d) 1. OVERVIEW OF THE GROUP’S BUSINESS AND OPERATIONS (CONT’D) 1.2 EPCC The Group holds capabilities to carry out EPCC of plants, facilities, road infrastructure and buildings, as well as other related systems and solutions, including design and installation of process control and instrumentation, auxiliary power generation and firefighting systems. The scope for EPCC includes installation of piping systems, installation of rotating and static equipment, installation of power generation equipment and plants, development of infrastructure, and construction of amenities and buildings. Other EPCC works that we carry out include the design, supply and installation of process control and instrumentation, and auxiliary power generation and firefighting systems. For some instances, we may sub-contract some aspects of the contract work to third parties to obtain expertise that is not available in-house as well as to practice timely delivery of our projects. We are also in the midst of the execution of the aforementioned Engineering, Procurement, Construction and Commissioning of Power Plants contract in Kota Marudu, Sabah, Malaysia. 1.3 OTHER PRODUCT & SERVICES The Group also provide technical training, provision of ICT solutions and services, supply of products and parts, and provision of logistics services. We also started our asset ownership business segment with our first compressed natural gas (“ CNG ”) plant located in Muaro Jambi, Sumatra, Indonesia. This business model involves majority equity participation in potential business entities, and will be an extension of our current core competencies where we can contribute our expertise in O&M services and EPCC. The CNG plant commenced its operations on 25 November 2016 and we will also be operating and maintaining the plant going forward. Additionally, we have comitted to undertake the projects in place for the development, ownership, operations and maintenance of the following assets: (i) One 0.8MW gas power plant in Ambon Island, Indonesia; (ii) One 4MW gas power plant in Muaro Jambi, Sumatra, Indonesia (iii) One 4MW & one 1MW gas power plants in East Kutai in East Kalimantan, Indonesia; and (iv) One industrial park with CUF in Sarawak As a group servicing customers, locally and overseas, our overall business strategy is to leverage on our core competencies in the O&G and power generation industries, and also asset ownership to enlarge our target markets across diversified industries and countries, diversify our revenue streams and essentially, drive our future business growth. For 2016 Bank Negara Malaysia announced Malaysia’s GDP growth at 4.2%. The central bank is opined that the global economy is expected to improve but remains a moderate growth pace. In spite of the challenging external environment, the Malaysian economy will continue its sustained growth trend driven by domestic demand. In respect of global economy, International Monetary Fund (“IMF”) in October 2016 has announced that global economic growth for 2016 is slowing at 3.1% following the June U.K. vote in favour of leaving the European Union (Brexit) and weaker than expected growth in the United States. However improvement is expected in 2017 with growth expected to increase to 3.4%. [1] As we are majorly involved in the O&G and power generation industries, which is also one of the key contributors to the nation’s economy development, the performance of the Group is closely tied to the overall prospects of these two industries. [1] http://www.imf.org/external/pubs/ft/weo/2016/02/