KNM wants to build renewable energy facilities overseas

SERI KEMBANGAN: KNM Group Bhd is eyeing jobs to build renewable energy facilities overseas after securing its first contract at home, managing director Lee Swee Eng said.

This includes bidding for a project to construct an ethanol plant in Brazil, where the group's process equipment manufacturing facility was targeted to start operation early next year.

"Part of KNM's growth strategy is to tap into the renewable energy sector,'' Lee told reporters after the signing ceremony for a RM122mil contract to design and construct a biodiesel plant for Mission Biofuels Ltd, a company listed in Australia.

The KNM group currently has 11 process equipment manufacturing facilities, five of which are in Malaysia, two in Australia and one each in Italy, China, the United Arab Emirates and Indonesia.

The biodiesel plant, which is to be Mission Biofuels' second in the country, is located next to its existing site in Kuantan Port, Pahang.

The new plant is targeted to have a biodiesel production capacity of 250,000 tonnes annually when completed in August next year, compared to the first plant capacity of 100,000 tonnes a year.

The first plant would start shipment by mid-September this year, Mission Biofuels' managing director Nathan Mahalingam said at the press conference after the ceremony on Wednesday.

"Even at current crude palm oil (CPO) prices, the project is still feasible,'' he said.

He added that although there are concerns that bio-diesel plants are not viable - with CPO price in the futures market at above RM2,500 per tonne - the company had already secured a five year off-take agreement with a major European based buyer for a large portion of its targeted combined 350,000 tonnes a year output.

Mission Biofuels also has a feedstock supply agreement with Cargill, which is building a palm oil storage facility in Kuantan Port.

Mahalingam said apart from biodiesel, the plant would also produce other high value products such as pure glycerine that would allow the venture to remain profitable.

The 250,000 tonnes per year capacity plant would be the largest biodiesel plant in Malaysia and the first in Asia to use the latest technology from Axens of France.

(istiqomah muhammad chaerun)