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Reports Malaysia

Malaysia stock market and companies daily report (May 09, 2014)

May 9, 2014, Friday, 07:22 GMT | 02:22 EST | 11:52 IST | 14:22 SGT
Contributed by Shares Investment

KKB Engineering’s Subsidiary Bids For Contracts Valued At RM700m

- KKB Engineering’s 43 percent-owned subsidiary OceanMight has submitted five tender bids for contracts worth some RM700 million to fabricate offshore facilities for the oil and gas industry. On top of these bids, KKB group has bid for another RM100 million worth of contracts as of 31 March.

- OceanMight was recently granted a license by Petroliam Nasional to fabricate offshore facilities for the oil and gas industry. This is part of KKB group’s long-term diversification plan to move up the value chain in structural steel fabrication to complement its traditional activities.

- To facilitate the fabrication of offshore structures for the oil and gas industry, KKB group has invested about RM86 million in a new steel fabrication yard. The new facilities built include five covered fabrication workshops and two jetties, which could handle up to 30,000 tonnes of steel structures.

Significance: KKB group aims to invest in modern and automated equipment to increase efficiency and output as well as ensure quality of the fabricated offshore structures, and has set aside a standby capital expenditure of RM50 million for three years up to June 2016 for offshore structure fabrication projects.

Genting Reveals US$4b Casino Plans

- Genting has unveiled plans for a multi-phased opening of its US$4 billion Resorts World Las Vegas, situated at the South Las Vegas Boulevard at the site of the old Stardust. Construction is scheduled to begin in 2H14 and will take between 24 to 36 months to complete.

- The new development would initially feature 3,500 gaming positions, 3,000 rooms, 22 villas, an aquarium, and more than 15 retail venues and 30 food and beverage outlets.

- In subsequent phases, it would add three new hotel towers, a water park, a movie theatre, a bowling alley, and a convention centre spanning some 1 million square feet.

Significance: Genting chairman Tan Sri Lim Kok Thay said, “Our goal at Resorts World Las Vegas is to complement existing properties and bring a new and unique entertainment destination to the Las Vegas Strip.” While this project may turn out to be lucrative, analysts are cautious about this development as Las Vegas strip gross gambling revenue growth has been sluggish.

MSM And AKI To Build Sugar Refinery By 2016

- MSM Malaysia Holdings and Al Khaleej International (AKI), a privately held sugar producer, enter into a memorandum of understanding with the intention to build a sugar refinery, costing between US$250 million and US$270 million in Johor. MSM would assume a 51-percent stake in the joint venture (JV) while AKI will hold the balance.

- The refinery, targeted for completion in 2016, will boost MSM’s annual production capacity to 3.3 million tonnes, up from 1.3 million tonnes currently.

- Additionally, MSM announced that they are looking at one or two JVs or acquisitions this year, as they hope that Malaysia will become the sugar hub in Asia Pacific within the next two years.

Significance: With the new technology that the partnership with AKI would bring, MSM expects to lower production costs by up to 38 percent, allowing it to compete with sugar players from Thailand.

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