KKB Engineering a frontrunner for RM790mil job

KUCHING: KKB Engineering Bhd (KKB) is one of the frontrunners for the job of constructing Asia Minerals Ltd's (AML) RM790mil manganese ferro alloy smelting plant in Samalaju Industrial Park,Bintulu.

The contract is expected to be awarded in the next two to three months.


Kho: ‘The bid for the AML (job) is among the tenders worth RM320mil which KKB had submitted as of March 31.’
KKB executive director Kho Pok Tong confirmed that the company had bidded for for the construction package of AML smelting plant,one of the four pioneer energy-intensive industries to be set up in Sarawak Corridor of Renewable Energy (SCORE).

“The bid for the AML (job) is among the tenders worth RM320mil which KKB had submitted as of March 31 this year,” he told StarBiz after the company's AGM here yesterday.

According to AML chairman Hirotaka Suzuki,the smelter project would be implemented in two phases, with the first targeted for commercial production in June or July next year and phase II to be operational by end-2014.

Phase I will have a production capacity of 200,000 tonnes per annum and this will be raised by another 100,000 tonnes per annum in Phase II. The project's site earthworks started early last year.

Kho said KKB had been pre-qualified for the construction job of OM Materials (Sarawak) Sdn Bhd's (OM Sarawak) US$500mil manganese and ferrosilicon alloy smelting facilities in Samalaju Industrial Park and some packages of Petronas Chemicals Group Bhd's US$1.5bil Sabah ammonia urea (SAMUR) project.

He said KKB was expected to complete in two months the RM70mil site earthworks for OM Material's smelter project.

OM Sarawak is a 80:20 joint venture between OM Holdings Ltd and Cahya Mata Sarawak Bhd (CMSB),which has a 20.05% stake in KKB.

The SAMUR project in Spitang Industrial Park involves the development of a new fertiliser plant with urea production capacity of 1.2 million tonnes per annum.

Kho said KKB would position itself well to undertake larger and more complex steel structures, including those for the oil and gas industry, when its new fabrication plant along Jalan Bako was fully commissioned by next month.

“The new plant will have a production capacity of 50,000 tonnes per annum which more than triples the current capacity of 15,000 tonnes per annum,” he added.

Three of the five workshops were commissioned late last year,and the fourth and fifth workshops would be operational next month.

KKB has invested some RM29mil in the new plant project on 27.6ha which also include the development of a 120m long private jetty.

The jetty due for full completion later this year could take in vessels up to 12,000DWT.

The land comprises a 16ha open yard.

The new plant is located in between Sarawak Energy Bhd's Sejingkat coal-fired plant and Assar Independent Oil Terminal.

KKB plans to diversify into fabrication of jacket and other structures and sub-structures for offshore oil and gas industry as well as marine sector through a strategic collaboration with Sarawak state-owned Brooke Dockyard & Engineering Works Corporation.

The 100-year-old Brooke Dockyard, which started as a major offshore module' fabricator in 1996, has delivered about 15 offshore modules and four offshore living quarters as well as nine sub-structures for major oil companies.

It also builds navigational boats,multi-mission vessels,ferries for marine engineering works and steel-arch bridges.

Brooke Dockyard is Sarawak's sole steel fabricator for the oil and gas industry registered and licensed by Petronas.

Under a six-month memorandum of understanding (Mou) signed last November,Kho said the two parties had identified certain projects in the oil and gas industry which they could jointly undertake.

He said the MoU had been extended for another six months to enable both parties to discuss and agree on the terms and conditions of their collaborations.

KKB and Brooke Dockyard may enter into joint venture on business they jointly carry out.

Kho said with the completion of its expanded steel fabrication capacity,KKB was positive that this would bring in new businesses for the group.

“We expects results of our current tenders worth RM320mil to be known in second-half this year.Sixty percent of these bids are in the engineering sector and the other 40% in manufacturing sector.

“We are bidding for other projects,like infrastructure,in Sarawak and Sabah,” he added.

Besides steel fabrication,KKB group is into manufacturing of steel pipes and LPG cylinders.

Meanwhile, for the first quarter ended March 31,2011,KKB recorded a 59% drop in group pre-tax profit to RM10.7mil from RM26.1mil a year ago.Group revenue dipped to RM52.5mil from RM59.5mil or by 11.8%.

KKB said gross profit from its engineering sector (made up of construction and steel fabrication divisions) plunged to RM5.1mil from RM26.8mil as no new contracts were secured in first quarter-2011.

It said major construction projects were completed last year, and that in the absence of new contracts,steel fabrication activities had slowed down.

However,KKB said the group's manfacturing sector registered a 211% jump in revenue to RM30.8mil from RM9.9mil due to strong sales of steel pipes as more rural water supply projects were rolled out in Sarawak and Sabah from fourth quarter-2011.Gross profit from manufacturing sector rose to RM8.2mil from RM1.4mil.

For the first quarter ended March 31,2011,KKB recorded a 59% drop in group pre-tax profit to RM10.7mil from RM26.1mil a year ago.Group revenue dipped to RM52.5mil from RM59.5mil or by 11.8%.

KKB said gross profit from its engineering sector (made up of construction and steel fabrication divisions) plunged to RM5.1mil from RM26.8mil as no new contracts were secured in first quarter-2011.

It said major construction projects were completed last year, and that in the absence of new contracts,steel fabrication activities had slowed down.

However,KKB said the group's manfacturing sector registered a 211% jump in revenue to RM30.8mil from RM9.9mil due to strong sales of steel pipes as more rural water supply projects were rolled out in Sarawak and Sabah from fourth quarter-2011.Gross profit from manufacturing sector rose to RM8.2mil from RM1.4mil.