New CEO at BHIC

SHAH ALAM: New CEO at BHIC. Boustead Heavy Industries Corporation (BHIC), has appointed Sharifuddin Md Zaini Al-Manaf as its new chief executive officer effective on April 1, the company says. BHIC in a statement said Sharifuddin was the former CEO of Orkim Sdn Bhd, a Malaysian state owned investment company providing tanker shipping services in the Asia-Pacific region.

Sharifuddin, 50, hold a bachelor’s degree in aeronautical engineering from Imperial College London and brings to Boustead a wealth of management experience amassed over more than 20 years working in the oil and gas and the shipping industries.

“BHIC is confident that with his experience and management capabilities, Sharifuddin will steer the organization through these challenging times and navigate it towards a path of profitability and growth, ” the company said.

Shariffudin replaced Ahmad Ramli Mohd Nor, 75, a former RMN chief, who was the managing director of BHIC since 2005. Ahmad Ramli was redesignated from MD to a non-executive chairman in April, last year before resigning from that position in November. It is likely as part of restructuring of BHIC, the MD post is now redesignated as CEO. Malaysian Defence report on the changes at BHIC last year

As the CEO of BHIC, Sharifuddin will have to break the financial and technical log-jam of the LCS programme, with the first ship now only expected to be ready for service in 2023. Based on the conversations I had with industry sources, I am inclined to believe that the 2023 deadline will also be missed. For context read this

LCS PCU. Maharaja Lela. Her name could be seen on the stern. Picture taken on Aug. 25. 2017.

With the country hit by the economic tsunami as a result of the Covid-19 pandemic, it is unlikely that the government can spare too much cash for the project. It is too big to fail though so perhaps Boustead may need to find another source of funding to complete the project and billed the government after all six ships are commissioned into service.

Apart from the LCS, the new BHIC CE0 will also have to deal with the soon to be ending Integrated Service and Support contract for the Prime Minister-class submarines. The previous administration had said the contract will be an open though restricted tender for the ISS contract when it lapsed next year. The change of government may favour BHIC JV but it is unlikely that another company can do the job even if an open tender is called. It will be just a matter of the government getting BHIC to agree to the price for the new ISS contract.

— Malaysian Defence

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23 Responses to "New CEO at BHIC"

A says:

April 2, 2020 at 5:35 pm

Tuan dan sesiapa yang tahu, adakah sekarang ini pembinaan keempat-empat hull LCS (LCS 1 – 4) masih berjalan walaupun masih menunggu komponen penting (IPMS) daripada syarikat America? Jika pembinaan hull ini masih berjalan ini bermakna keempat-empat hull LCS itu sudah 90% siap la kan secara fizikal?
... says:

April 2, 2020 at 6:19 pm

Off topic

With the price of oil is going into historical lows, IMO this is the prefect time for malaysia to beef up and increase its strategic petroleum storage stocks.

Yes this capability is not always discussed openly, but it is there since the 80s.
AM says:

April 2, 2020 at 10:24 pm

“IMO this is the prefect time for malaysia to beef up and increase its strategic petroleum storage stocks.”

I would think stocks are building up by default because they cannot be sold.
... says:

April 2, 2020 at 11:09 pm

@ AM

“I would think stocks are building up by default because they cannot be sold”

a strategic stock means that the volume would still be there when situations goes back to normal. Some are stored in normal fuel farms. But some are stored in specially build fuel bunkers deep in the mountains.
norddin says:

April 3, 2020 at 2:33 pm

Salam sejahtera.
saya terpanggil untuk memberi sedikit komen berkenaan LCS dan BHIC.
siapa pun yang mejadi ceo tidak penting kerana projek kapal ini perlu segera disiapkan.Tempoh dan kos telah berjela-jela meningkat tetapi hasil tiada sebuah pun kapal yang memasuki perkhidmatan.
Ini adalah sesuatu yang memalukan dan kerana itu keupayaan syarikat pembina kapal pertahanan tempatan di persoalkan.
BHIC perlu didenda untuk pengajaran kerana kelewatan ini.

Reply
You are wrong, the company needs a good leader who can not only solve the financial and technical issues as well. It’s an engineering company if the CEO is not technically competent the company will bleed money as it is the core business of the company.
Of course they will be charged with the delays but it will not help them to complete the ships.
Zulkhairi Ghazali says:

April 3, 2020 at 3:32 pm

“… strategic petroleum storage stocks.”

Why spend money to build new. Just ask Petronas to lower our production cukup lah. What we do not extract means we simpan lah kan
Kamal Ex RMN says:

April 3, 2020 at 6:43 pm

Apabila sesuatu projek besar dari kerajaan yg melibatkan aset ketenteraan pasti akan timbul isu atau masalah yg tak sepatutnya berlaku…kesilapan dan kelemahan pengurusan akan memberi kesan yg besar kepada pentadbiran operasi TLDM khasnya. Isu politik juga memberi impak jika tidak ditangani dgn baik. Apa yg penting perancangan yg teliti tanpa melindungi ketirisan atau kebocoran duit rakyat perlu diatasi agar isu keselamatan negara tidak akan diperlekehkan.
AM says:

April 3, 2020 at 6:48 pm

Off topic- Are our service museums willing to let volunteers participate in maintaining the artifacts of our heritage? If they are unable to do it themselves, the task should be opened to those with the interest and motivation to do so.

Volunteer days can be held for people to socialise and organise themselves. Functions can include physical maintenance, historical research and promotion of its findings, public events and possibly the contribution of funds (on a matched basis or some other basis that doesn’t allow the government to avoid responsibility.)

I hope some volunteer could ask an elected representative for funding to at least keep artifacts out of the weather.

Reply
They’re are there mostly AFAIK for special days turning up dressed as soldiers from the past. I think its difficult to get volunteers in to do other duties as the equipment though long retired are still considered government properties as part of the museum collection.
Kamal says:

April 3, 2020 at 7:04 pm

Subject to if money is available and it is economically wise to do so, maybe arming all the Kedah class with exocet mm40 block2 and Searam could be an option while waiting the maharaja lela to be commissioned in 2023 or 2024. Well if it is technically feasible, and little cost possible maybe armed it with NSM already ordered. For Anti Air, we’ll either stick with gun base or maybe worst just use manpads to save cost. But only do this if there is such a need so as not to disturb Navy long term planning. For long range patrol and constabulary role, maybe the 3 new MMEA vessels and LMS could cover?
... says:

April 4, 2020 at 12:41 am

Right now IMO it should be the TLDM and MINDEF that should up their ante and make sure that the project have all the countermeasure plan for the delays in place.

This is also the perfect time to review all the systems that is still not installed or even ordered. Probably to change the smart-s radar in the integrated mast to the newer NS100 like on the singaporean LMV is too late. But things like the air defence missile could still be reviewed.

@ zulkhairi

You cannot just turn off the petroleum taps. It is more complicated than that.
AM says:

April 4, 2020 at 3:03 pm

“They’re are there mostly AFAIK for special days turning up dressed as soldiers from the past.”

Reenactors in Malaysia are some of our most passionate people over our military history. I know some to conduct research into WW2 battles and visit WW2 sites to document and publicise them. We can retain our heritage -knowledge as well as physical artifacts- if only those in charge are willing to make it more accessible. As is said, information not shared is information lost.

“I think its difficult to get volunteers in to do other duties as the equipment though long retired are still considered government properties as part of the museum collection.”

The question is, which government’s property? Ouessant, KD Rahmat (whose retirement proved as tragic as her life) and several A-4s were transferred to states and local councils. Anything sensitive is stripped long before this point.

… :

“a strategic stock means that the volume would still be there when situations goes back to normal. ”

Suppliers of strategic commodities, such as fuel, rice or flour, especially government owned ones, can be mandated to hold X days of stocks of X percentage of business volume similar to how banks are required to hold X percentage of assets in cash.

“Some are stored in normal fuel farms. But some are stored in specially build fuel bunkers deep in the mountains.”

The bulk of strategic reserves are of crude oil stored in excavated caverns.

Refined product reserves have to be kept in tanks. Those for general economic use are not in hardened storage because it is impossible to do so for such amounts. Hardened storage is almost always reserved for supplies at air and naval bases.
Azlan says:

April 4, 2020 at 4:57 pm

Kamal – ‘the Kedah class with exocet mm40 block2 and Searam could be an option while waiting the maharaja lela’

The issue actually is not the limited number of ships that are armed for external threats but the limited number of ships we actually have; determines the number of ships we can put to sea and to maintain at sea at anyone time to meet existing operational commitments.

Kamal – “For Anti Air, we’ll either stick with gun base or maybe worst just use manpads to save cost””

If one wants to stick to the ‘better than nothing’ principle then fine but it depends on the threat level. If a particular system doesn’t provide a particular capability against threats likely to be encountered then in reality it provides no capability : with the right ammo, fire control and early warning certain main guns can deal with certain types of missiles but MANPADs/V-SHORADs will be next to useless.

Kamal – “For long range patrol and constabulary role, maybe the 3 new MMEA vessels and LMS could cover?””

It will take a lot more than that. The MMEA needs sufficient sustained funding over a certain period to have the needed ships and air assets; as well as coastal based sensors to reach a point where the RMN can devote its resources and attention to non constabulary type roles.
Kamal says:

April 6, 2020 at 11:53 am

https://www.bharian.com.my/berita/nasional/2020/04/673510/syor-gunakan-nuri-semula-hantar-bantuan-pedalaman-ketika-pkp

Off topic, personally i disagree to reactivate the Nuri. Maybe the better choice to dry lease some of the EC725 from mhs, if it is available and meet TUDM spec
.... says:

April 6, 2020 at 2:11 pm

@ Kamal

Well to me it is an easy solution.

Boustead, just give those 5x EC225LP to TUDM and write it off as a Covid 19 donation for god’s sake.
joe says:

April 7, 2020 at 1:28 pm

@…
Boustead is in no economic health to be making huge donations. They are even likely going to up their BHPetrol cash cow. Their partner in this business has just setup their own petrol franchise so Boustead is on their own.
... says:

April 7, 2020 at 4:20 pm

@ joe

Marked-up donations could always be offset with LHDN tax deductions.

Which is way better than being burdened with depreciating and non performing asset like the EC225LP.
joe says:

April 7, 2020 at 7:58 pm

@…
A professional company would have their resources to lower LHDN taxation and that includes other forms donations. Donation of assets is unprecendented and highly disputable as both parties would need to nego on the asset’s worth and AFAIK there is no clause in taxation for offsets with assets. Its easier for Boustead to sell the choppers and donate from the proceeds IF they no longer want to hold on them and IF they want to make a donation.

As it is, a donation to offset taxation is the least concern for a company in trouble esp with Tabung Haji (their biggest stakeholder) was selling off assets and holdings, so their biggest investor cannot come save them.
romeo says:

April 8, 2020 at 9:41 am

There will be a long rainy day in defence sector.
Without covid-19 case the gov already difficult to provide money needed in defence sector.
There will be a contraction in economy even with the RM 250 Billion stimulus package.
That RM 250 Billion is considered government debt and must be paid gradually in years.
IMO, The already unsufficient 1% of gdp as stated in DWP for defence budget will not be achieved even for current budget. I think the gov will modified the current budget to fight the covid-19.

I wish all projects in progress such as LCS, LMS, Gempita, etc will still running. New aqusitions are just wet dream even for ex-kuwaiti hornet.
... says:

April 8, 2020 at 12:23 pm

@ romeo

Less than rm50 billion of that is government money actually. The rest is your debt deferment from banks and your money taken out of your own epf for your own spending.

With this happening, it would be hard for the defence sector to maintain its funding. But remember enemies are not going to let this great chance of grabbing what they could while many countries are weak.
Kamal says:

April 8, 2020 at 6:50 pm

Jap bhic largest shareholder Is LTAT not tabung haji. DestINI YES I think largest stakeholders TH. True firm normally dona tea an asset if the book value already almost zero or due to obsolesce or no more potential economic value can be derived. In Bhic case I don’t believe the financing for those assets has yet been fully settled so I don’t believe donating it not financial viable option for them
... says:

April 9, 2020 at 12:01 pm

@ Kamal

BHIC is wholly owned by Boustead, which in turn owned by LTAT

Destini is a private company, it just did a JV with THHE for MMEA OPV project.

MHS is owned by Boustead. The EC225LP helicopters have sat idle for years. The asset value has badly depreciated due to the helicopter bad safety record in oil and gas sector while the asset itself is not making any money for Boustead/MHS. I believe the helicopters book value is very minimal as they already got the settlement from petronas

http://www.theedgemarkets.com/article/boustead-reaches-settlement-petronas-carigali-3-others-over-helicopter-contract-termination

So there are plenty of ways to go around this.

They can donate the helicopters and make money in lieu of more TUDM helicopters to service. All EC725 is serviced through BHIC aeroservices.

http://www.thestar.com.my/business/business-news/2017/07/21/mindef-extends-bhic-helicopter-service-contract-for-rm215m

They could also donate the helicopters in exchange of MINDEF allocating the needed extra money to complete the LCS project.

Any way forward, donating the helicopters can be used to improve bousteads cashflow.
Kamal says:

April 9, 2020 at 6:02 pm

Yep you are right. I mistaken it for DestINI Berhad whom jemaah urus hsrta formerly LTH was the 4th largest shareholders
Azlan says:

April 9, 2020 at 6:24 pm

From a technical perspective I fail to see why the EC225LP can’t be operated by the RMAF. Even though companies like Weststar and MHS don’t issue crews with NVGs (for the reason that they are not needed for the non tactical flying conducted – even during night flights) all modern helis have NVG compatible cockpits and stuff like a hoist (not needed by the services Weststar and MHS provide) can be added without hassle.

As such the question of whether commercial platforms like the EC225LP meets the RMAF’s specs shouldn’t arise at all.

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