KUALA LUMPUR (Aug 27): Oil and gas player Dialog Group Bhd’s wholly-owned subsidiary Dialog Fabricators Sdn Bhd (DFSB) has inked a joint venture agreement with China-based company Morimatsu Technology Company (MTS) today, to collaborate and provide one-stop engineering fabrication services for critical process equipment, pressure vessels and facility solutions.

This is to support various industries and to serve its customers locally and internationally from DFSB’s facility in Pengerang, according to the group’s filing with Bursa Malaysia.

DFSB specializes in fabrication of offshore structures, storage tanks, sphere tanks, LPG bullet tanks, pressure vessels, structural steel and piping, with a fully equipped facility measuring 127 acres in Pengerang. 

DFSB has been serving the local and regional customers in the oil, gas, petrochemical and process industry.

Meanwhile, MTS is a wholly-owned subsidiary of Hong Kong-listed Morimatsu International Holdings Company Limited, which has a market capitalisation of approximately HK$11 billion.

It is a pressure equipment manufacturer and provider of integrated pressure equipment solutions, offering traditional pressure equipment, modular pressure equipment and value-added services associated with the pressure equipment in industries, such as chemical, pharmaceutical, personal care chemical, mining and metallurgical, oil and gas and electronic chemical industries.

Following this JVA, a special purpose vehicle (JVCO) will be incorporated and structured, whereby MTS will hold a 51% equity stake and DFSB will hold 49% equity stake in JVCO.

The total investment outlay is estimated to be approximately RM14 million, said Dialog. It is envisaged that the group will use internally generated funds to finance its investment in JVCO.

“Dialog is committed to its core values and key strategies of a sustainable business by capturing opportunities and mitigating risks through its diversified portfolio. Through this collaboration with Morimatsu, the joint venture will complement Dialog’s fabrication division and further strengthen Dialog’s fabrication capabilities and market reach, thereby capturing further opportunities,” the group said, adding that the JVCO is expected to contribute positively to the long-term future earnings of the company.

Shares of Dialog ended in the red, falling 2.54% or seven sen at RM2.69 with a market capitalisation of RM15.19 billion. The stock has fallen 22.48% year-to-date (YTD) from when it was trading at RM3.47 apiece.