KUALA LUMPUR (May 16): Fibromat (M) Bhd (KL:FIBRO) is aiming for more main contractor jobs after landing its biggest deal — a RM283.5 million road project in Kelantan — marking its shift from subcontractor to main contractor.

Its managing director and chief executive officer Danny Ng during a press briefing said this milestone shows the company’s ability to expand beyond erosion control into larger civil works. He’s optimistic about winning more government projects, noting strong infrastructure funding from the Public Works Department (JKR).

“In fact, we hope to demonstrate to JKR that this project can serve as a benchmark for future reference. JKR currently has significant funding available, and doing business with the government is not an issue,” Ng stated.

He addressed concerns about Fibromat’s ability to deliver, noting its past work on the Central Spine Road and strong ties with client Casa Hartamas Sdn Bhd.

Originally set for completion in 2026, the project was delayed due to land issues and is now expected to finish by 2028.

Fibromat is speeding up work on its section — Package 2 and Section 2A — which involves building a 20 kilometre, four-lane highway (R5 standard, 90km/h). The job includes earthworks, pavement, structures, drainage and slope protection, linking Sungai Lakit Bridge to Gua Musang and Paloh 2.

Ng is confident Fibromat can deliver on time, highlighting the executive team's experience with projects worth over RM5 billion.

The company has set aside RM12 million for the project, including the purchase of 15 lorries and four excavators, which will be used soon.

With internal funds and bank financing, Fibromat expects positive cash flow and low payment risk due to the contract's structure and reliable payments.

About 11% of the project involves geotechnical works (Fibromat's specialty), 30% covers earthworks, and 40% is for pavement, all handled in-house. The rest, including bridges and drainage, will be subcontracted.

Fibromat expects a gross profit margin of up to 20%, boosted by contracts and changes that could increase the project value.

Besides the Kelantan project, the company has an order book worth RM183 million over the next three years.

At the time of writing, Fibromat shares were up 1.5 sen or 3% at 52 sen, valuing the company at RM129.1 million. The stock, which transferred from the LEAP Market to the ACE Market on May 8, is trading 5.45% below its IPO price of 55 sen.