Ecoscience Secures RM61.8 Million Contract for Palm Oil Plant Construction

The Board of Directors of Ecoscience ("Board") announces that the Company’s wholly owned subsidiary, Ecoscience Manufacturing & Engineering Sdn Bhd ("EMESB"), accepted a Letter of Award ("LA") issued by OSB on June 12, 2024. This involves undertaking the engineering, procurement, construction, and commissioning of civil and structural works for a 420 tonnes/day CPO pretreatment plant and a 400 tonnes/day PME plant, along with auxiliary buildings. The project will be located on Lot 30153, Port Dickson Refinery, in Daerah Port Dickson, Pekan Port Dickson, Negeri Sembilan ("Works") ("Project").

Key provisions of the Letter of Award (LA) include: (i) a contract amount of RM61,800,000.00; (ii) a Contract Completion Date set as the 534th day from the LA's issuance; (iii) a performance bond equivalent to 10% of the contract amount, provided as an unconditional on-demand bank guarantee until the warranty bond is secured, and to be submitted before the release of the down payment; (iv) in case of delay beyond the Contract Completion Date, EMESB must compensate OSB at a rate of RM44,143.00 per day or part thereof, subject to approval of extension of time, with total liquidated damages not exceeding 10% of the contract amount at Works commencement date; and (v) a defects liability period after Works completion: 460 days for equipment requiring registration with the Department of Occupational Safety and Health, and 365 days for other components such as materials, tanks, and buildings.

Apart from the typical operational risks inherent in the Letter of Award (LA), which are customary in the Company's and its subsidiaries' ordinary business activities, there are no anticipated significant risks. The Group will implement appropriate measures to mitigate these risks.

Financially, assuming no unexpected setbacks, the Letter of Award (LA) is anticipated to bolster the Group's earnings and net assets throughout the Project's duration, provided there are no significant delays as outlined in Section 2. However, the LA will not impact the Company's share capital or its existing shareholding structure.

The Letter of Award (LA) is considered part of the Group's regular business operations and therefore does not necessitate approval from the Company's shareholders or any relevant authorities. This straightforward administrative process aligns with established practices within the Company's operational framework.

Ecoscience offers comprehensive solutions for constructing palm oil mills and related facilities, along with fabricating equipment. Our primary focus lies in constructing plants, predominantly palm oil mills, bolstered by our in-house fabrication capabilities for equipment. Additionally, we provide supplementary services such as material and equipment supply, spare parts, and maintenance services.