KNM wants to buy foreign firms, expand product line

 By Sharen Kaur

Process equipment maker KNM Group Bhd (7164)aims to buy foreign firms and expand its product line in a bid to diversify and improve earnings, its chief said.



The group, which has RM300 million cash, is eyeing companies with investments in green technology, total solution and process, nuclear and environment, among others.

“There will be some major things happening within the next one year. The idea is to expand geographically and strengthen our product line,” KNM managing director Lee Swee Eng said.

Lee said the investment KNM made in 2008 to buy Borsig GmbH of Germany for e350 million (RM1.4 billion) has strengthened its belief that acquisitions are the right thing to do.

KNM’s German operations have been contributing 50 per cent to the group’s revenue and net profit.

Lee expects KNM to do better this year and growth to accelerate from 2012, driven by its order backlog of RM4.5 billion and business expansion.

KNM will start to see recognition from its RM680 million turnkey project in Uzbekistan and its RM2 billion biomass plant in the UK.

Last year, KNM posted a net profit of RM131.2 million on revenues of RM1.6 billion.

“Overall, we are profitable and on the road to recovery. Our existing order backlog is at an all time high compared to an average RM3.5 billion prior to the economic crisis.

“We are bidding for new projects worldwide,” Lee said at a luncheon in Kuala Lumpur yesterday.

Lee declined to comment on whether KNM will be taken private with its share price falling below fair market value.

Meanwhile, the luncheon, hosted by Germany Trade & Invest and Malaysian-German Chamber of Commerce and Industry, presented new opportunities for Malaysians to invests in all sectors in East Germany, backed by Europe’s largest airport project, Berlin Brandenburg International Airport (BBI).

BBI will have a capacity of 27 million passengers when it opens in early 2012.