ppb group plans to expand flour mills in vietnam, indonesia

PPB Group plans to spend RM140m to expand its flour mills in Indonesia and Vietnam over the next two years. PPB expects to double its Indonesian mill capacity to 2,000 tonnes daily with an investment of US$30m (RM91.5m). As for PPB’s Vietnam plant, the group plans to double its capacity to 800 tonnes a day with an investment of RM50m. PPB’s Indonesian business has enormous potential due to the Republic’s big population, and its operations are slightly more than one third of their Peninsular Malaysia operations, but its utilisation rate stood at only 60%. At the same time, PPB also plans to strengthen its flour business in China by buying a 20% stake in each of Wilmar’s 14 flour mills in the superpower nation. PPB has allocated RM190m as capital expenditure – excluding its Indonesian, Vietnam and China ventures for the next few years with 60% to be used this year by its subsidiaries. Of the total, RM100m will be to open eight additional cinemas under Golden Screen Cinemas over three years and RM15m more for interior furnishings upgrade.

Significance: Expansion in production capacity will allow the company to better meet the increasing needs of its customers while maximising its utilisation of resources. At the same time, this expansion would help the company to capture a larger market share and extend its regional footprint.

Uzma Ready To Expand In Asia
Uzma is ready to expand in Asia after it received Petronas’ vote of confidence in its ability to squeeze more oil from old oil fields. This week, it won a three-year RM200m contract from Petronas for its services, with a two-year extension option. Uzma hope that by end of 2012, it will be able to expand this service overseas, which is certainly a game changer for Uzma. This new solution is an advanced production enhancement system that helps oil and gas companies improve production in dying oil fields, or commonly known as brownfields. Three units are now in operation on a pilot basis and the installation of a fourth unit is underway. These units are installed on platforms in Malaysian waters. By year-end, there will likely be eight units in operation and its contribution to the company’s revenue is expected to rise to 50% by 2012.

Significance: This new technology will enable the company to gain a competitive edge over fellow competitors. In addition, with its ability to contribute significantly to the company’s bottomline in the near future, the company can expect additional liquidity that can be utilised for expansion plans and working capital.

RHB Maintains Outperform On KNM
RHB Research is maintaining an Outperform on KNM Group and retained its fair value of RM3.45 a share. This implies an upside of 43.6% against the current share price. This week, KNM Group announced that it has secured new orders amounting to RM693m so far this year, underpinned by improved sentiments in the global oil and gas industry, taking the current order backlog to RM5.4b, which is an all-time high for the group. “We previously mentioned that FY11 will be a better year for KNM given that order flows have improved since 2H10 on the back of rising crude oil prices and better global economic sentiment that have led to heightened spending by the global oil and gas players. Furthermore, with crude oil prices hovering above US$100/barrel, we expect oil majors to gain confidence with exploration and production spending, especially in high-end projects which require more sophisticated process equipment,” it said.

Tags: ppb group Vietnam

Posted by VBN on Mar 20 2011. Filed under Industry. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry