The Official Opening of Zhongyou BSS (QinHuangDao) Petropipe Co Ltd

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ON 5TH JUNE 2009 (FRIDAY), 10A.M.

YBhg Tan Sri Datuk Asmat Kamaludin,
Group Chairman, UMW Holdings Berhad,

YB Dato’ Mustapa Mohamed
Minister of International Trade and Industry

H.E. Dato’ Syed Norulzaman Syed Kamarulzaman

Mr Li Xin Hua,
Vice President, China National Petroleum Corporation,

Your Excellencies,
Distinguished guests,
Ladies and gentlemen,

1. First of all, I would like to thank the Board of Directors and Management of Zhongyou BSS (Qinhuangdao) Petropipe Co Ltd for inviting me to officially open this state-of-the-art pipe manufacturing and coating plant; supplying to the fast-growing and robust oil & gas industry. Please allow me to congratulate the management and staff of Zhongyou BSS on this auspicious occasion.

2. I understand that this company was set-up via a joint venture between BSG, a subsidiary of China National Petroleum Corporation (CNPC) and the UMW Group of Malaysia. CNPC is, of course, China’s largest oil & gas producer and supplier. The UMW Group is an established Malaysian conglomerate, with an enviable history spanning more than 90 years. I would also like to take this opportunity to congratulate the management of BSG and UMW on this successful joint venture.

Ladies and gentlemen,

3. Since my late father, the second Prime Minister of Malaysia, started diplomatic relations between Malaysia and China more than 35 years ago, the bilateral trade and economic cooperation between the two countries has seen tremendous progress. While the government to government cooperation has developed stronger over the years, I am also very pleased to note that the Malaysian companies are heeding the government’s call to venture into China and take advantage of the huge opportunities available to them in this country. The Malaysian government will continue to encourage and provide adequate support for Malaysian companies to venture abroad, especially into China which has emerged as one of our most important trading partners.

4. In that regard, I would like to congratulate the Board of Directors and management of the UMW Group, a government-linked company, for their vision and decision to expand their operations into China. True to its slogan, “Beyond Boundaries”, the UMW Group has established 6 pipe manufacturing, coating and threading plants in China, making it one of the more successful Malaysian GLCs operating here. I am confident that Zhongyou BSS too will grow to be among the leading oil & gas industry players in China. With an area covering over 200 acres, it is certainly a large manufacturing plant, with expansion capabilities to cater to the growing demand. The success of this venture will set a shining example and I hope other Malaysian companies will emulate the success of the UMW Group and venture forth beyond our own shores to seek success not just in China, but also elsewhere around the globe.

Ladies and gentlemen,

5. Despite the global economic crisis and volatile oil prices, the oil & gas industry has continued to grow at a steady pace. From 1998, when Asia was reeling from its financial crisis, to mid-July 2008, just before the US subprime mortgage-led credit crunch, world oil prices increased more than 10 fold, from around USD13 to USD147 per barrel. Never before in world history had oil prices shot over the USD100 mark. In fact, the highest ever was USD70 in the early 80s.

6. Just as shocking as the sudden rise in prices was the sudden plunge, from USD147 to USD38 per barrel in early December last year. Currently, it has somewhat stabilized and is hovering at about USD60 per barrel.

7. Volatility is nothing new in the world of commodities. But such drastic volatility is unsettling, to say the least. At the height of the oil price spike, entire governments were shaken and countries were rattled. Such is the importance of the oil and gas industry, which provides the life blood that literally keeps the modern world running. Clearly it is an industry that has significance beyond just dollars and cents. Rather, it is an industry that impacts the very lives of people and the well-being of nations.

8. The oil and gas sector is a key component in Malaysia’s economy. Oil and gas is a major contributor to the Federal Government’s revenue. The sector is among the largest recipient of FDI and one of our biggest sources of foreign exchange. Our petrochemical industry is driven by the availability of hydrocarbon feedstock from domestic oil and gas sources. This industry also provides the necessary raw materials for the domestic downstream sectors such as plastics processing. It goes without saying that the industry is one that extremely lucrative and has great potential for expansion and growth. Of course it is a capital intensive industry which would require substantial investment and capital outlay, but the rewards from a successful venture would be well worth the cost.

9. I would encourage more Malaysian companies having the financial capacity and capability to explore opportunities in this sector to tap the great potential of this industry. Of course the likelihood is that it would require the formation of partnerships and joint ventures for purposes of synergy and compatibility. But the results, as I said will be well worth the obstacles in the initial stages of the venture, as can be seen from this plant that we are launching today. In addition it would encourage technology transfer which will increase Malaysia’s own expertise in this arena. On the part of the government, we stand ready to provide all necessary support when it comes to ventures that will prove beneficial to Malaysia and the Malaysian economy, especially in these challenging times. I look forward to seeing more Malaysian companies making names for themselves in this key sector and I hope similar partnerships like we see before us today can be duplicated and enhanced many times over.

10. Finally, I congratulate UMW and BSG once again on your successful joint venture and I wish you great success. On that note, it gives me great pleasure to officially open Zhongyou BSS (Qinhuangdao) Petropipe Co Ltd.

Thank you.

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