Will Ecoscience International Become the Black Horse of Bursa?

Ecoscience International Berhad (KLSE: EIB) has long been a leader in the construction and engineering of palm oil mills and renewable energy facilities.

Known for its commitment to sustainable solutions, Ecoscience is now stepping into a transformative phase with a landmark RM200 million contract from Wilhelmina Energy Malaysia Sdn. Bhd. (Wilhelmina) to build the world’s first TG2 Black Pellet Plant in Kuantan, Pahang.

This project promises not only to expand the company’s portfolio but also to reshape the renewable energy landscape in Malaysia, marking a significant opportunity for investors.

A Milestone Contract with High Growth Potential

Under this contract, Ecoscience will provide a full suite of engineering, procurement, and construction (EPC) services, including the design, sourcing, construction, and testing of the TG2 Black Pellet Plant.

This facility is set to be the first globally to use oil palm empty fruit bunches (EFB) as feedstock, transforming agricultural waste into TG2 black pellets—a cleaner, sustainable drop-in replacement for coal.

With superior energy density, water resistance, and compatibility with existing coal infrastructure, these pellets offer a cost-effective and environmentally friendly energy alternative, supporting both Ecoscience’s and Malaysia’s carbon-reduction goals.

Strategic Benefits and Earnings Visibility

As the largest contract ever secured by Ecoscience, this project significantly enhances its order book and provides earnings visibility over the next two years.

Expected to commence in December 2024 with a 24-month completion timeline, the project aligns with Ecoscience’s expansion into renewable energy and environmental sectors. This growth avenue is set to provide substantial revenue, making Ecoscience an attractive investment prospect for those seeking exposure to sustainable energy and long-term profitability.

Potential for Recurring Revenue Streams

Beyond the EPC scope, Ecoscience and Wilhelmina are exploring an operation and maintenance (O&M) partnership for the TG2 Black Pellet Plant upon its completion. If finalised, this arrangement would establish a new recurring income stream, providing a stable revenue base to complement Ecoscience’s project-based work.

This potential O&M contract reinforces the Group’s strategy to develop sustainable and consistent revenue sources, reducing reliance on one-time projects and enhancing overall financial stability.

Conclusion: A Strategic Investment Opportunity

Ecoscience’s new RM200 million contract is a pivotal step that aligns with global trends towards sustainable energy and resource efficiency. This milestone not only validates the company’s technical capabilities but also signals its commitment to innovation in the green energy space.

For investors, Ecoscience International Berhad presents a promising opportunity, backed by a strong order book, potential for recurring revenue, and a strategic foothold in a burgeoning market.

As the Group embarks on this transformative journey, it is well-positioned to deliver substantial returns, making it a stock worth considering for forward-thinking investors.