KKB ... Apr11

KKB Engineering Bhd is well positioned for steel fabrication and civil construction jobs with the start of the construction of factories for energy-intensive industries at the Samalaju Industrial Park, Bintulu, which is located within the Sarawak Corridor of Renewable Energy (SCORE).

The company had sought to be pre-qualified for contracts in the construction of factories involving foreign direct investments (FDIs) in SCORE.

Japan's Tokuyama Corp, the first foreign investor in Samalaju Industrial Park, is building its plant to produce polycrystalline silicon for solar panels. The company will invest some RM2.36bil in the project, with production expected to come on stream in 2013.

The second energy-intensive industry expected to be set up in Samalaju Industrial Park is a manganese smelting plant by Asia Minerals Ltd. Minerals' planned facility would have an annual capacity of 400,000 tonnes.

With the company's strong expertise and financial position, KKB group was capable of undertaking big projects that were related to its core business of steel fabrication and civil construction. The group also manufactures LPG cylinders, steel pipes and related products for both domestic and overseas markets.

KKB's net cash position had surged to RM103mil as of Dec 31, 2010, from RM41mil in 2009. This gives the company a lot of leverage in capital expenditure requirements and securing contracts.

KKB's first major project in SCORE is the RM196mil Samalaju water supply scheme, which is expected to be completed in three months' time, ahead of the August 2011 deadline.

The company was awarded the project as a turnkey contractor on a design-and-build basis. The project involves the laying of 800mm and 650mm-diameter mild steel cement- lined steel pipes stretching for some 85km from Bintulu town to Samalaju.

These pipes were manufactured by the KKB group.The project will supply 35 million litres per day (MLD) of raw water and 5MLD treated water to industries in Samalaju, the proposed Samalaju new township and nearby coastal villages.

The KKB group had tendered for more than RM330mil worth of contracts as of Dec 31, 2010 in Sarawak, Sabah and Brunei. These bids comprise 60% in the engineering sector and 40% in manufacturing and expect the outcomes of these bids in the second half of 2011.

KKB posted its best-ever group net profit of RM76.9mil on a turnover of RM286.6mil for the financial year ended Dec 31, 2010. The board has recommended a final gross dividend of 12.5sen per share, bringing its gross dividend for 2010 to 17.5sen.