KKB eyes Sabah portion of highway
Steel fabricator aims to supply products for the construction of the Pan Borneo project
KUCHING: KKB Engineering Bhd, a key beneficiary of the Sarawak portion of the Pan Borneo Highway project, is eyeing to supply steel-related products for the Sabah portion of the biggest infrastructure plan.
Group executive director Kho Pok Tong said KKB was pursuing the supply of steel water pipes, guard rails and low/high tension steel poles required for the construction and upgrading of the over 700km Sabah portion of the highway.
Wholly-owned subsidiary KKB Industries (Sabah) Sdn Bhd owns manufacturing facilities involved in the production of steel pipes and pipe specials, steel fabrication and hotdip galvanising in Kota Kinabalu.
Prime Minister Datuk Seri Najib Tun Razak launched the sixth work package of the Sabah portion last week.
In Sarawak, KKB and its joint-venture partner WCT Holdings Bhd are implementing one of the 11 work packages of the highway project. The KKB-WCT package is worth RM1.29bil.
According to Kho, KKB had secured several orders for the supply of steel-related projects for the highway’s Sarawak portion.
In a filing with Bursa Malaysia last month, KKB said it had received purchase orders from CMS Infra Trading Sdn Bhd and Kimlun Sdn Bhd for the supply of concrete-lined mild steel pipes and mild steel casings respectively worth a combined RM23.9mil.
The Kimlun Corp Bhd and Zecon Bhd joint-venture is implementing a RM1.46bil work package for the project.
CMS Infra’s parent company Cahya Mata Sarawak Bhd is also involved in the construction of the highway – via its subsidiary PPES Works (Sarawak) Sdn Bhd, in partnering Bina Puri Holdings Bhd – under a package worth RM1.36bil.
“We are continuing to bid for the supply of water pipes and other steel-related products for the highway project. The requirements for most of the products are expected to flow in from mid-2018 (when construction and upgrading works gain momentum),” he added.
According to Works Minister Datuk Seri Fadillah Yusof, 10 of the 11 work packages were progressing ahead of schedule at 7.53% as of last week against the targeted completion of 4.33%. Phase one covers 786km and phase two 95km.
Kho said KKB was keen to participate in the relocation of water pipes for the highway.
It is estimated that between 30% and 40% of the existing water pipes along the highway on Sarawak side might be relocated or replaced.
In the third quarter to Sept 30, 2017, KKB construction division generated a revenue of RM24.3mil which was derived from the Pan Borneo highway project.
Kho said the group’s tender book stood at RM322mil as at the third quarter. The figure comprised bids for engineering and manufacturing contracts (RM92mil) as well as oil and gas contracts (RM230mil) submitted by 43%owned associate company OceanMight Sdn Bhd.
“The outcome of the tenders are expected within the first half of 2018. Our target success rate in the tenders is between 30% and 40%,” he added.
According to Kho, the group’s order book stood at RM1.1bil as of the third quarter when it returned to the black with net profit of RM4.97mil from a loss of RM135,000 in the
same quarter last year.
Group revenue rose sharply to RM49.3mil from RM27.6mil during the same period.
He said KKB is financial strong with net cash of about RM95mil.
With the existing contracts in hand for the supply of mild steel cement lined pipes (MSCL) and pipe specials, LPG cylinders and steel fabrication works, together with construction work for Pan Borneo highway project, the management remained confident that it could produce improved results in the fourth quarter.
In notes accompanying the results, KKB said the newly secured orders for the MSCL pipes and pipe specials to ad hoc customers worth RM20.9mil would be realised in the fourth quarter.
In the third quarter, the group saw the return of LNG cylinder supply order to NGC Energy Sdn Bhd, with billings of RM2.1mil.