KUCHING: The demand for steel water pipes is a key factor that is likely to fuel the future growth of KKB Engineering Bhd. According to KKB, the demand for steel water pipes is expected to remain firm, buoyed by on-going and upcoming projects planned under the Sarawak state water grid when more water-related infrastructure projects are rolled out during the implementation stage.
“This will similarly occur in Sabah,” said the steel fabricator, which owns and operate steel pipe manufacturing facilities in Kuching and Kota Kinabalu, Sabah, in its newly released 2018 annual report.
Under the Sarawak water grid project, more than 240 projects will be implemented under a RM2.8 billion funding from the state government. These projects, which are being progressively awarded, include water treatment plants, a water distribution network system, pipe replacement, upgrading works, non-revenue water management as well as modernisation of Sarawak alternative rural water supply.
KKB has secured two contracts worth RM110.87 million under the water grid project in February this year. One of the contracts is for the design, construction, completion, testing and commissioning of the proposed Package SRI (southern region) while the second is for the proposed water supply from Kota Samarahan to Sebuyau – construction and completion of mild steel concrete-lined pipeline and all associated works.
Last month, KKB group received a purchase order from Laras Jaya Engineering Sdn Bhd for the supply of steel concrete-lined pipes for the water grid programme – stressed areas.
Earlier this week, subsidiary KKB Industries (Sabah) Sdn Bhd also received a purchase order from Leadshine Sdn Bhd for the supply and delivery of similar water pipes for projects in Sabah.
KKB said the new supplementary contract worth about RM46.7 million from CMS Infra Trading Sdn Bhd to its 90 percent-owned subsidiary Harum Bidang Sdn Bhd for the supply and delivery of concrete-lined mild steel pipes and mechanical couplings to JKR central unallocated stores at Tanah Puteh here would help to strengthen the group’s steel pipe manufacturing business.
“The group is continuously pursuing various engineering projects, particularly projects related to the supply, laying and commissioning of water pipes and other related infrastructure works that are planned to be implemented under the Sarawak state water grid project,” added KKB in the annual report management’s discussion and analysis segment.
In his statement to shareholders, KKB chairman and group managing director Datuk Kho Kak Beng said the company is developing an increasingly diverse portfolio of operations that would reduce its dependence on any single product or sector.
“Our presence in the major onshore fabrication for the oil and gas facilities will facilitate the group to diversify our core business in structural steel fabrication engineering for the oil and gas sector to complement our traditional engineering and manufacturing business activities.
“We continue to look at modern technology and talent to support and grow our core competencies in structural steel fabrication engineering for the oil and gas sector,” he added.
The group has invested in modern and automated heavy machineries and equipment and covered fabrication workshop in its fabrication yard along Jalan Bako to cater for the fabrication requirements in the oil and gas offshore structures.
The yard is equipped with a private deepwater jetty with loadout capacity of up to 30,000 tonnes of fabricated structures.
In 2018, Kho said KKB, via subsidiary OceanMight Sdn Bhd, secured three new fabrication contracts worth RM300 million for the oil and gas sector.
One of the projects – engineering, procurement, construction, installation and commissioning of wellhead platforms for D28 phase 1 project under Petronas Carigali Sdn Bhd was completed in seven months.
Kho said by investing in modern technology and equipment for the group’s manufacturing plants and continuing to improve the efficiencies of its existing assets, KKB expects that demand for its fabricated and manufactured products within both its engineering and manufacturing sectors would remain strong in the face of increased competition and downward pressure on pricing.
Besides steel fabrication, the group is involved in hot-dip galvanising, manufacturing of liquefied petroleum gas cylinders and civil construction.
“The group is well positioned and has exciting prospects going forward. We have developed a strong, high performance culture with a committed workforce and absolute integrity in our operating
procedures.
“The long term prospects for the group are encouraging and I remain confident that we will continue to deliver value for our customers, employees, shareholders and other stakeholders in the coming years,” said Kho.
In financial year ended Dec 31, 2018, KKB group’s net profit soared to RM23 million from RM3.3 million in 2017 or an increase of over 600 percent as group revenue surged to RM412.5 million from RM209.3 million year-on-year or up by 97 percent.
