KKB to invest up to RM25mil to expand fabrication yard

Posted on 11 March 2019

Source: The Edge

The steel fabricator is gearing itself up in anticipation of more fabrication jobs for offshore structures in the oil and gas industry after KKB’s subsidiary OceanMight Sdn Bhd was awarded Petroliam Nasional Bhd’s (Petronas) frame agreement recently.


The agreement, according to KKB group executive director Kho Pok Tong(pic), will qualify OceanMight to bid for contract works from Petronas involving the provision of engineering, procurement and construction (EPC) of fixed offshore structures.

OceanMight is one of the five companies (three in Peninsula Malaysia and two in Sarawak) awarded the Petronas frame agreement that is effective for the next six years

The other company in Sarawak is state-owned Brooke Dockyard and Engineering Works Corp.

“OceanMight is capable of fabricating light and medium weight wellhead platforms,” he told StarBiz.

Since obtaining its fabrication licence from Petronas in 2013, OceanMight has completed five contracts worth some RM300mil for oil majors. The company is expected to complete two more on-going fabrication contracts worth RM170mil by end-2019. Kho said piling works for the fabrication yard’s workshop project along Jalan Bako near here are scheduled completion between nine and 12 months.

“The covered mega workshop with building height of 50m will accommodate multiple projects up to 18,000 tonnes per annum of works to be carried out simultaneously.”

He said the additional investment in the fabrication yard would include overhead heavy lifting equipment, state-of-the-art machinery and automation.

KKB group has so far invested about RM140mil in the Jalan Bako fabrication yard, which currently has five covered workshops and load-out jetties fronting the Sarawak River. The group owns another steel fabrication yard in Bintawa Industrial Estate here.

“Over the next three years (2019-2021), OceanMight targets to bid up to RM500mil worth of contracts under the Petronas frame agreement,” said Kho.

With the recent rollout of several mega infrastructure projects, including Sarawak coastal highway, second trunk road, water supply and electricity connectivity, he said KKB had set a target of replenishing its group order book of RM200mil each year for three years (2019-2021).

As at Dec 31, 2018 (FY2018), the group’s order book stood at some RM800mil. That could keep it busy until 2021. The group’s tender book, according to Kho, is RM468mil.

“We expect about 40% of the tenders the group has submitted to have their outcome known by second quarter-2019,” he added.

KKB recently announced that it had secured two contracts worth RM110.8mil under the Sarawak Water Supply Grid Programme - stressed areas.

According to Sarawak Chief Minister Datuk Patinggi Abang Johari Tun Openg last year, the state government allocated RM2.8bil to fund some 247 projects under the state water grid programmes to be used over a two-year period in 2019 and 2020.

Kho said besides bidding for construction works for water supply projects, KKB, as Sarawak’s sole steel water pipe manufacturer, is hopeful of supplying pipes to contractors who had secured construction job.

“As of last month, we have quoted up to RM85mil worth of pipe supply not only for Sarawak water grid project but also water supply projects in Sabah,” he added.

KKB group has a manufacturing plant in Kota Kinabalu, Sabah. The company, which has cash reserves of about RM140mil, has an approved capex of RM30mil for 2019.


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