KKB eyes Sabah por­tion of high­way

Steel fab­ri­ca­tor aims to sup­ply prod­ucts for the con­struc­tion of the Pan Bor­neo project

The Star Malaysia - StarBiz - - Front Page - By JACK WONG starbiz@thes­tar.com.my

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.

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