TECO Electric & Machinery Co., Ltd, a prominent Taiwanese conglomerate, has successfully acquired an 80% stake in Malaysian MEP engineering firm NCL Energy Sdn Bhd and its renewable energy subsidiary for RM 70 million. This strategic acquisition is expected to finalize in the second quarter of this year. With this move, TECO aims to bolster its presence in Malaysia’s MEP engineering market, particularly in the data center and renewable energy sectors. NCL has been a key partner of Tenaga Nasional Berhad (TNB), Malaysia’s leading electricity provider, and boasts a team with substantial expertise. This collaboration provides TECO with crucial MEP engineering licenses and a skilled workforce.
Strengthening Presence in Malaysian Market
The acquisition of NCL not only fortifies TECO’s foothold in the Malaysian MEP engineering market but also enhances its capabilities in the renewable energy sector. By leveraging NCL’s established connections and partnerships, TECO aims to deliver comprehensive MEP services, especially for growing data center demands. Malaysia, positioned as a strategic hub with favorable electricity costs and ample land, attracts significant investments from global tech giants like Google, Microsoft, Amazon Web Services, and Oracle. This acquisition aligns with TECO’s strategy to tap into high-growth regions and increase its overseas revenue beyond the 50% mark within the next two to three years.
TECO plans to capitalize on NCL’s existing relationships with major Malaysian EPC contractors such as Gamuda and Sunway. These connections will enable TECO to deliver comprehensive MEP services to international cloud computing clients. TECO’s Intelligence Energy Business Group, experienced in constructing data centers in Taiwan and Singapore, sees Malaysia as a gateway to the flourishing data center market in Southeast Asia. This growth potential is expected to draw over US$ 20 billion in foreign investments within the next five years, further reinforcing TECO’s strategic move.
Expanding Portfolio and Market Reach
Beyond MEP engineering for data centers, TECO’s acquisition strategy involves expanding into other markets, including solar power plants, battery energy storage systems (BESS), EV charging, and MEP equipment sales. This aligns with the company’s overarching goal to diversify its project portfolio and increase eco-friendly ventures. NCL’s founder Dato’ Ng Keng Hiong expressed pride in joining forces with TECO, highlighting nearly two decades of MEP and solar engineering accomplishments in Malaysia. The collaboration on hyperscale data center projects has fortified TECO and NCL’s partnership, setting the stage for further expansion in the region.
TECO Chairman Morris Li emphasized Malaysia’s robust growth in power infrastructure and progressive renewable energy policies. These elements are attracting substantial investments, driven by Malaysia’s competitive electricity costs and geographic proximity to Singapore. By consolidating its resources with NCL, TECO is well-positioned to compete for extensive data center, solar power plant, and MEP engineering projects. This strategic move underscores TECO’s long-term commitment to the Southeast Asian market and aligns with its broader objective to tap into high-growth regions while amplifying its overseas revenue.
Strategic Implications and Future Prospects
TECO Electric & Machinery Co., Ltd, a well-recognized Taiwanese conglomerate, has successfully acquired an 80% stake in the Malaysian MEP engineering firm NCL Energy Sdn Bhd, along with its renewable energy subsidiary, for RM 70 million. This strategic acquisition is slated to be finalized in the second quarter of this year. Through this move, TECO aims to strengthen its footprint in Malaysia’s MEP engineering market, with a special focus on the data center and renewable energy sectors. NCL has been a crucial partner of Tenaga Nasional Berhad (TNB), Malaysia’s foremost electricity provider, and is known for its highly skilled team. The collaboration offers TECO essential MEP engineering licenses and a talented workforce, enhancing its capabilities. With NCL’s established presence and expertise, TECO is well-positioned to expand its influence and innovation in the MEP and renewable energy markets in Malaysia, making this acquisition a pivotal step in its growth strategy.
