KKB ... Sep10

KKB Engineering Bhd, Sarawak’s sole manufacturer of steel water pipes, has bid for four water-related projects in the state. The outcome of some of the bids was expected by year-end (2010). However, it did not reveal how much these four proposed projects were worth.

KKB is now implementing the RM196mil Samalaju water supply scheme to bring raw and treated water from Bintulu to the proposed Samalaju Industrial Park within the Sarawak Corridor of Renewable Energy. The project is more than 60% completed to date. It involves the laying of 700mm and 800mm-diameter mild steel cement-lined pipes along a 90km route. The project requires more than 10,000 tonnes of water pipes which we have manufactured and delivered.

KKB’s subsidiary Harum Bidang Sdn Bhd received a letter of award from CMS Infra Trading Sdn Bhd on Aug 30 for the supply and delivery of various concrete-lined mild steel pipes and mild steel mechanical couplings worth RM114mil. The contract over 24 months (Sept 1 to Aug 31) is on an as-and-when required basis. CMS Infra Trading is a subsidiary of Cahya Mata Sarawak Bhd (CMSB), which is a major shareholder of KKB.

Harum Bidang had the capacity to take on more jobs as its plant’s normal utilisation rate was between 40% and 50% but increased to nearly 70% when it secured the contract to produce water pipes for the Samalaju project.

The  company could always get help from wholly-owned KKB Industries (Sabah) Sdn Bhd, which also owns a steel water pipe factory in Kota Kinabalu.

Its Sabah plant is one of the two water pipe manufacturers in Sabah. Its normal utilisation rate is between 30% and 40%, and goes up to betweeen 50% and 60% when there are more orders.

Besides water pipes, KKB manufactures LPG cylinders for both the domestic and export markets. The manufacturing division contributed about 50% to group revenue last year. The other 50% revenue came from the engineering division, which is made up of civil construction, steel fabrication and hot-dip galvanising.

Contribution from the engineering division to group revenue had jumped to 75% for the first six months of 2010 with the remaining 25% coming from the manufacturing division.