Earthworks and civil engineering specialist Advancecon Holdings Bhd announced that its 51%-indirectly owned quarry operator, Spring Energy Sdn Bhd (SESB) had secured an agreement with an estimated value of RM18.8 million to provide certain quarry operation and related services at a new site in Kinta, Perak.
SESB accepted this agreement from the quarry owner, Aalborg Resources Sdn Bhd, to operate the mine for four years until December 2025.
SESB will be appointed as the sub-contractor to provide quarry development services such as opening access roads and removing overburden, extracting limestones and other related operations to supply quarry owners with products for onward sale.
Advancecon’s acquisition of Spring Energy Resources Berhad (Spring Energy) was completed on 13 December 2021. Apart from the quarry operations rights in Perak, Spring Energy also manages quarry sites across Terengganu, Pahang, Negeri Sembilan and Selangor.
Dato Phum Ang Kia, Group Chief Executive Officer of Advancecon Holdings Berhad said, “With this new quarry services agreement, Spring Energy now operates at nine quarry sites strategically located in Peninsular Malaysia, hence enhancing our ability to support the growing industry demand for quarry products.”
“Our well-timed acquisition of the majority stake in Spring Energy positions us favourably to capture the resurgence in demand from the construction and infrastructure sectors, as the nation shifts into pro-development mode.”
“Not only that, the acquisition also allows Advancecon to enjoy synergistic benefits within the enlarged Group through the utilisation of quarry products sourced internally from Spring Energy for Advancecon’s earthworks and road-based infrastructure construction activities.”
As part of its acquisition by Advancecon, Spring Energy would provide a total profit after tax guarantee of RM12.0 million over the 24-month financial period across financial years ending 31 December 2022 and 2023, with RM6.1 million per year attributable to Advancecon based on the 51% equity interest.
“This new quarry services agreement would help buoy the earnings for Spring Energy to be more sustainable going forward and contribute to the growth of Advancecon,” says Phum.