- The Star reported today that KKB Engineering could emerge
as one of the front-runners for the construction of the Asia Mineral’s Ltd
(AML) ferro alloy manganese smelting plant at Samalaju Industrial Park in
Bintulu division, Sarawak.
- The AML facility is one of the four pioneer
energy-intensive plants that is being set up within the SCORE region. The
smelter project is to be implemented in two phases. The first phase is targeted
for commercial production in June/July 2013 – the second by end-2014. Phase I
is envisaged to have a production capacity of 200,000 tonnes. This would subsequently
be raised by another 100,000 tonnes under Phase 2.
- Thus far, the AML project site earthworks commenced early
last year. From our channel checks, we gather that the construction award would
be dished out within the next three months.
- From our channel checks, we gather that the construction
package for the AML smelting plant forms part of some RM320mil worth of tenders
that KKB has submitted as at March 31 2012.
- KKB’s other near-term job flows could come from: (i) the
US$500mil construction of OM Materials Sdn Bhd’s manganese and ferrosilicon
alloy smelting facilities (KKB is due to complete the RM70mil earthworks
package for this plant within two months and has been pre-qualified for its
construction works); (i) certain packages of Petronas Chemicals Group’s
US$1.5bil Sabah ammonia urea project (SAMUR).
- We gather that KKB’s new fabrication facility along Jalan
Bako is scheduled to be fully commissioned next month – boosting its capacity
to 50,000 tonnes from 15,000 tonnes currently.
- Thus far, KKB has invested some RM29mil in its new
28ha-fabrication facility – including the development of a 120m-long private
jetty. Thus far, three out of five of
KKB”s workshops have been commissioned late last year – while the fourth and
fifth workshops would be operational in June.
- More importantly, the increasing proliferation of
energy-intensive investments within SCORE would add on to rising job prospects
within Sarawak’s SCORE. Apart from building/infrastructure opportunities, we
highlight four major jobs that would likely be rolled-out in 2012:- (i) 600MW
Balingian coal-fired power plant (RM2.5bil); (ii) 500kV backbone transmission
system (Bunut-Kuching) [RM3bil]; (iii) balance of works for the Kuching
Sewerage project (~RM1.7bil); and (iv) New Samalaju port (RM1bil).
- Press Metal, Hock Seng Lee (HSL) and Sarawak Cable remain as our top picks for leverage to
Sarawak’s burgeoning SCORE region. Rounding up our BUYs within this space are
KKB Engineering, Naim Holdings and Bintulu Port.
Source: AmeSecurities
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