KUB eyes RM2b revenue with growth plans

Kuala Lumpur: KUB Malaysia Bhd, a diversified group, plans to more than double its revenue to RM2 billion by expanding its liquefied petroleum gas (LPG) business, bidding for more construction jobs and growing its plantations.


It is also keen to have a private equity partner for its fast food business under the A&W brand, which is nearing its turnaround point with the opening of new stores.

The group, 22.55 per cent held by the Minister of Finance Inc, made a net profit of RM11.5 million on revenue of RM796.2 million for the year to December 31 2010.

KUB group managing director Datuk Mohd Nazar Samad is confident of winning a bid for Shell's LPG business, a move that will almost triple its market share in the industry.

"We think that Shell would want to finish (the sale) this year," he told reporters at a briefing yesterday.

KUB now produces about 130,000-140,000 tonnes of LPG but having Shell's business, reportedly worth RM500 million, would double its capacity and raise its market share to 32 per cent from 12 per cent now.

Under its property, engineering and construction division, it is partnering IJM Corp Bhd to build a 243-bed specialist children's hospital in Cheras. On its own, it has bid for a RM350 million job to build a runway and taxiways for the new low-cost carrier terminal in Sepang, Selangor.

KUB also holds 40 per cent of a venture with Malaysia Steel Works (KL) Bhd to build a RM1.2 billion inter-city rail system in Iskandar, Johor. The 20-year project has been endorsed by the state government and is awaiting approval from the Economic Council.

"Our play in this is handling the construction and there is also some 200 acres for property development in Kempas," Mohd Nazar said.

The rail project is scheduled to start in 2013.

KUB will also expand its oil palm plantations from an area of about 9,000 hectares to about 25,000ha.

Another core business is the offering of information and communications technology (ICT). The group is hopeful of winning contracts under the government's plan to offer digital television, starting from 2015.

Last year, the bulk of KUB's operating profits came from its construction business, followed by plantations and ICT. Its LPG business provided some RM3 million in operating profit and A&W lost some RM13 million.

Although A&W is not profitable yet, KUB intends to keep it as it needs to open about 20 more stores to achieve critical mass at some 60 outlets. This is one reason why it is keen on having a partner to grow the business further.

"We're looking at partners to accelerate our plans. We're willing to share," Mohd Nazar said.

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