KNM Group Bhd (7164) has been given a thumbs-up by ECM Libra Investment Research for its recent investments in China.
"As always, it is good to see KNM being proactive and honing on expanding market share in Asia as well as growing the Borsig business, diversifying it away from being predominantly European," the research house said in a report yesterday.
Last Friday, KNM announced its investments in KNM China Pte Ltd, Borsig Valves (China) Pte Ltd and Borsig Compression (China) Pte Ltd.
The group is a global leader in the manufacture of process equipment and processing units for the oil and gas, petrochemicals, minerals processing, desalination, renewable energy, chemicals, steam generation, power and environment industries.
The setting up of the three subsidiaries was to enable the KNM to further expand into China for the manufacturing of Borsig compressors and ball valves as part of Borsig's strategy.
"From what we understand, the plan was for Borsig to move out part of its manufacturing operations to places where operations were cheaper.
"Initially, KNM talked about bringing production to Malaysia but it appears that the group is choosing China instead as a destination for both valve and compressor manufacturing," the research house said.
Borsig's ball valves and compressors are patented products and fall into the high-end process equipment category.
KNM's order book currently stands at RM2.2 billion. - Bernama |
