THE manufacture of steel water pipes has become a major income spinner for Sarawak-based KKB Engineering Bhd, contributing more than 25% to its group revenue of RM61.3mil for the year ended Dec 31, 2003.
KKB’s 80%-owned subsidiary Harun Bidang Sdn Bhd, which is involved in the manufacture and trading of steel water pipes and other specialised pipes, last year recorded a strong growth in turnover to RM16.6mil from RM6.8mil previously.
KKB group managing director Kho Kak Beng foresees encouraging prospects for the steel water pipe manufacturing business as RM287mil in both state funds and federal loans were reported to have been approved for the Kuching Water Board under the 8th Malaysia Plan Mid-Term Review.
He said having secured steel water pipe supply and laying projects in Sarawak and Brunei, the company's construction division saw revenue soar to RM17.4mil last year from RM6.2mil in 2002 or up 181%.
The company is also eyeing steel water pipe projects in Sabah.
KKB posted a group pre-tax profit of RM4.5mil last year, a marginal increase from RM4.2mil in 2002, although its revenue shot up by 17%.
“The marginal 6% increase in pre-tax profit reflects the very competitive business environment,” Kho said in the company’s 2003 annual report.
The group’s traditional core businesses are in steel fabrication and manufacture of liquefied petroleum gas (LPG) cylinders and steel drums as well as construction and engineering business.
Kho said the company had secured for the first time a contract to supply LPG cylinders to petroleum company BP Malaysia Sdn Bhd.
KKB is actively participating in existing customers’ global procurement tenders to exports its cylinders.
He said KKB, through its associate company Edisi Optima Sdn Bhd, was carrying out inspection on used cylinders and requalification work on direct contracts with petroleum companies for most of the cylinders in circulation in Sabah and Sarawak.
This business was expected to grow further this year, he added.
Did you find this article insightful?