Kelington secures gas system, piping job in China worth RM65m

Kelington Group Bhd has secured a contract worth 102.62 million renminbi, equivalent to RM65.4 million, from Chengdu Construction Engineering Corporation to supply and install bulk gas system and distribution piping for an integrated circuit manufacturing systems project in Chengdu, China

Kelington Group Bhd has secured a contract worth 102.62 million renminbi, equivalent to RM65.4 million, from Chengdu Construction Engineering Corporation to supply and install bulk gas system and distribution piping for an integrated circuit manufacturing systems project in Chengdu, China.

According to Kelington, the contract was awarded to its wholly-owned subsidiary Kelington Engineering (Shanghai) Pte Ltd, which specialises in providing engineering services.

"We are benefitting from the growth of the semiconductor industry in China which is largely driven by the 'Made in China 2025' government initiative to increase China's production of electronics and semiconductor products," Kelington chief executive officer Raymond Gan said in a media statement today.

"The works will be commenced immediately and is expected to be completed by April 2018," Kelington said in a filing with Bursa Malaysia today, adding that the works will be funded through internally generated funds and bank borrowings.

It is worth noting that the integrated manufacturing systems project is owned by US-headquartered semiconductor wafer foundry firm GlobalFoundries and Chengdu Municipal Government in China.

On Feb 10, GlobalFoundries announced that it is investing over US$10 billion to build a manufacturing plant in Chengdu Hi-tech Industrial Development Zone in China, to produce a 12-inch wafer — a semiconductor wafer used in integrated circuits.

The plant in Chengdu was said to commence its operations beginning from the fourth quarter of 2018.

At noon break, shares in Kelington rose 2.5 sen or 3.91% to pause at 66.5 sen today, valuing the engineering services provider at a market capitalisation of RM152.84 million.

Source: The Edge Markets

Posted on : 30 October 2017
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Last Updated : Friday 13th December 2019