New Strait Times - 6 October 2004       PROCESS equipment maker KNM Group Bhd is targeting 20-30 per cent sales growth next year on the back of its regional and product expansion.

Managing director Lee Swee Eng said the company plans to expand the production capacity of its plant in China as well as scout for acquisition opportunities in Indonesia.

KNM has three plants in Malaysia and one in China.

It is currently finalising a joint venture with FBM-Hudson Italiana SpA (FBM), in which KNM will buy a 50 per cent stake in FBM’s manufacturing plant in Dubai.

The joint venture will allow KNM to market and manufacture FBM’s products in China and the Association of South-East Asian Nations region.

FBM is one of the top two process equipment manufacturers in the world.

“We will be able to make use of FBM’s Jebel Ali workshop in Dubai to undertake projects in West Asia, North Africa and the Caspian Sea region,” Lee told reporters after a shareholder meeting in Seri Kembangan, Selangor, yesterday.

He added that the Jebel Ali workshop will free the capacity of KNM’s existing fabrication yards in Malaysia and allow the company to accept more jobs.

The venture will provide KNM with a minimum annual dividend guarantee of e1.8 million (e1 = RM4.71) in the first year, and e2 million and e2.2 million in the second and third year respectively.

Lee said the Dubai plant will start contributing to its earnings in the year ending December 2005.

The firm will start expanding the China plant early next year. It is expected to operate at full capacity by end-2005.

The China plant, which can churn out 11,500 tonnes of products a year, is running at 50 per cent capacity.

Lee said the expansion will double the plant’s output to 23,000 tonnes a year by 2006.

KNM has a RM293 million order book, which will keep it busy until end-2005.