Saturday, January 16

Petronas vendors eye regional market expansion within four years

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KUALA LUMPUR: Petronas newly-appointed vendors plan to leverage on the national oil company’s vendor development programme (VDP) to build capacity as regional players within four years.

One of the vendors, Masray Plastik Sdn Bhd, a form-fill seal bag manufacturer, has benefited from the programme by getting assistance and monthly orders from Petronas to enhance its operations.

“We’ve been given eight years to improve our business under the VDP and once we’ve ‘graduated’, we would venture into regional markets by targeting polymer plants in neighbouring countries,” Masray Plastik managing director Manaf Hamid told reporters at a briefing here yesterday.

He expects orders from Petronas to increase at least threefold once the Pengerang Refinery and Petrochemical Integrated Development (Rapid) comes on stream in 2018 to enable Masray Plastik to compete regionally.

“Once Petronas confirms orders for Rapid, we will buy more machine to increase our capacity,” he said.

Petronas, being the sole user of form-fill seal bags, buys RM24 million worth of the products yearly for two of its plants in Kerteh, Terengganu.

Masray Plastik and another vendor, FM Plastic Sdn Bhd, signed the VDP agreement on Dec 2 to supply form-fill seal bags for the plants in Kerteh as well as for Rapid.

FM Plastic managing director Datuk Sharifuddin Musa said the VDP enabled the company to focus on quality production with an assurance of monthly orders and price equality.

“As both contracts are similar, we are competing on the quality of our offerings,” he said.

Prior to the appointment, he said both companies underwent a yearlong training with Petronas on human capital management and machine operations.

Since its introduction in 1993, Petronas had enlisted 90 Bumiputera vendors with the aim of enhancing their capability and capacity in medium and high-technology businesses.

In March, the VDP was broadened into four categories, namely general competitive (for contracts based on meritocracy), import substitution (to reduce dependency on foreign vendors), regional (to increase local participation in key states where Petronas operates), and critical growth (to address demand and supply gap).