Two Malaysian firms have joined forces to form a joint venture company in an effort to provide repair services of marine vessels which include dry docking repair, refit, refurbishment, maintenance and technical solutions at the ship repair facilities located in Kemaman, Terengganu.
Namely, the country’s shipbuilding and heavy engineering industries firm Malaysia Marine and Heavy Engineering (MMHE), a subsidiary of Malaysia Marine and Heavy Engineering Holdings Berhad, and service and facility provider for the oil and gas industry Eastern Pacific Industrial Corporation (EPIC) have executed a joint venture agreement to establish MMHE EPIC Marine & Services.
MMHE said that it is the majority shareholder with 70% shares, while EPIC holds 30% of the shares in the JV company.
The parties earlier bought a floating dock from South Korea’s Yeisu Ocean, which would support the operation of the newly-formed company. The 5,000 tonne floating dock was delivered to Kemaman on July 30, 2016.
The announcement comes on the back of the recently introduced tax incentives for the Malaysian shipbuilding and ship repairing industry as the country aims to attract further investments in these sectors.
Malaysia said that the incentives would provide new companies with either a Pioneer Status with 70% of Income Tax Exemption on statutory income for a period of 5 years or Investment Tax Allowance of 60% on the qualifying capital expenditure incurred within 5 years from the date the first qualifying capital expenditure is incurred.
Furthermore, existing shipbuilding and ship repairing companies are offered an Investment Tax Allowance of 60% on the additional qualifying capital expenditure incurred within a period of 5 years.