Issue 07 │ March 2013

KNM Bulletin

KDN No : PP 16290/02/2012(029131)

World Class Process Equipment Manufacturer and Total Solutions Provider www.knm-group.com

Editorial Team• Ng Boon Su (Advisor)• Fariz Abdul Aziz (Editor-in-Chief)• Michael Lee• Michelle Mok

P.S. - If you do have exciting news to share, please forward them to Michelle Mok at michelle@knm-group.com

EDITOR’S NOTEDear Readers,Although we are well into the New Year, on behalf of the editorial team, I hope we are not too late in wishing everyone in KNM a productive and exciting 2013!

The past year was especially challenging for all of us here at KNM as we strived to bring KNM back to profitability after a disappointing FYE2011. Judging by the recent announcement of KNM’s 4th Quarter results, it does looks like all our hard work is paying off and the challenge for 2013 would be to sustain this momentum- which basically means that we would have to work even harder than before!

Congratulations are also in order for our friends in Germany with the Borsig Group celebrating its 175th anniversary last year. Founded by August Borsig in 1837, Borsig played an important role in Germany’s 19th century industrial revolution particularly in the field of steam locomotive engineering. Since then, Borsig has continued to grow from strength to strength and is now an icon of German engineering. Klaus Woweriet, the Mayor of Berlin had this to say about Borsig “BORSIG is one of the great names in German industrial history, and even today, it is still a byword for German engineering skill across the world ”. High praise indeed for an institution that has taken two world wars in its stride and long may they continue to grow and prosper in this century and beyond.

Over in Italy, it is good to know that loyalty and dedication is rewarded when in December 2012, FBM Hudson organized an award presentation ceremony to honour its dedicated employees for their long service in conjunction with its Christmas celebrations. I was surprised to find out that there are employees that have served the company faithfully for more than 30 years. To these dedicated staff, my hats off to you. Closer to home, new initiatives have also been rolled at our Malaysian plants as we strive to promote efficiency, professionalism and dedication among our workforce. Let’s hope that these initiatives will bear fruit soon.

In closing, we would like to thank all those who have contributed to this Newsletter. We look forward to many more interesting stories and milestones to share with you. Do send us your feedback on how this Newsletter can be further improved as we continue to explore ways to better ourselves.

Fariz Abdul AzizEditor-in-Chief

Lunar Year Prediction For 2013 According to Feng Shui master consultant Liew Shaw Pin, the year of the snake is slated to bring in bright future outlook to the economy and the market as a whole.

“In Feng Shui, the balance of the five elements is vital when it comes to calculating the outlook of the year. So, when the five elements are balanced for the year, we believe that year will be a very prosperous year. For 2013, we regard it as a balanced year because we have all the five elements in play. This signifies that there will be a gradual comeback in the market with this year being the starting point of recovery,” Liew explained.

Source : Borneo Post

KNM wishes all a Happy &

Prosperous Chinese New Year.

Gong Xi Fa Cai!

WELCOME NEW MEMBERS

Other New Employees

Lim Kian EngBuyerPlant & Technology Division

Nurlian Binti HairuddinDrafterProcess Equipment Division

Ahmad Haffizie Bin RosliDrafterProcess Equipment Division

Marimuthuraja A/L AppavooProject EngineerProcess Equipment Division

Nor Ezzura Binti EzzuddinExpeditor (KL)Plant & Technology Division

Tham Tuck HoongChief Transformation Officer (Transformation Director)

Graduated with a BSc in Production Engineering and a Diploma in Marketing he has also attended a post graduate course with the London Business School. Over 30 years of experience in the area of strategy development and implementation. He partners with business leaders and senior management teams to review and where necessary rechart their strategies within the validity of the operating environment.

Che Norzam Binti TayibMaterial Controller (KPS)Process Equipment Division

Lee Peai FungBuyerPlant & Technology Division

Mohd Izham bin Abu BakarProject Engineer (KPS)Process Equipment Division

Nurul Izza Binti HusinBuyerPlant & Technology Division

Shahira MustafaCommercial Executive (KL)Plant & Technology Division

On behalf of the Group, we would like to extend our warmest welcome to our recent new members in KNM:-

Steven ChadwickExecutive Project Director, EPCC Hydrocarbon Division

34 years in the construction, oil and gas, water and power industry with 22 years in senior management including 6 years as the Owner/General Manager of a successful Mechanical Installations company in the UK including full engineering and fabrication workshop. He possesses a Diploma in Mechanical Engineering.

Sivakumar A/L ThrujanamSnr Contracts & Legal Officer

Maricris Macarayon MecosSenior Structural DetailerProcess Equipment Division

Farah Tan Chin LinBCC Executive

Kenneth Sidney ForwardProject Manager (KL)Plant & Technology Division

Luwe H. OngSenior Planning Engineer (KL)Plant & Technology Division

Sushil KotwalDeputy Project Manager (KL)Plant & Technology Division

Ir. Lee Peng ThiamSenior General Manager, Malaysia Operations – Process Equipment Division

A Registered Professional Engineer, Ir. Lee Peng Thiam possesses a Masters in Business Administration and BEng in Civil Engineering.

He has over 28 years of experience in company and business management, consultancy, operational and project management for international companies including the oil and gas sector.

PROJECT HIGHLIGHTS

On 27 December 2012, the Methanol Reactor was ready for loadout from FBM Hudson’s plant in Italy. The equipment measuring 4m diameter x 23m length with design temperature of 8MPa e 330°C and made of low alloy steel 2-¼ Cr – 1 Mo (containing 1808 tubes in carbon steel) was unique in design, utilizing innovative manufacturing technologies that conformed to international codes and standards and meeting strict quality and technical requirements.

The complexity of the manufacturing along with stringent manufacturing tolerances and innovative welding technologies was a big challenge to the production team.

In 2012 BORSIG Process Heat Exchanger delivered 4 syngas trains, consisting each of 1 steam generator, 2 superheaters and 2 economizers.

Our customer Mississippi Power in Kemper County, Mississippi, USA is building a 582 MW power plant, scheduled to be completed in 2014. The Kemper County IGCC project is a power plant for producing electricity with integrated coal gasification. It is a combination of heat and pressure that turns coal into synthesis gas. A very high coal-to-gas conversion rate together with comparatively low temperature makes this process special.

The Kemper project was the biggest single order ever placed with BORSIG Process Heat Exchanger GmbH.

››› Italy FacilityDelivery of Methanol Reactor to China

Syngas Trains to Kemper IGCC Project, USA

›››Germany Facility

At Canada, work is currently progressing well for the design and fabrication project of 6 very large vessels (over 10m in diameter by 30m in length, weighing in at approx. 400T each). These will be the largest diameter vessels ever built in Canada!

This project for Suncor draws upon engineering and material purchasing from HQ, head forming from KNM Exotic shop, and overall fabrication/assembly from KNMPE Tofield. The project is going very well so far and delivery is scheduled for early 2014.

We are confident that this will be the first of many large projects from Canada that will benefit all at KNM

›››Canada FacilityVessels for Suncor

›››Changshu Facility

Remaining Towers for Salina Cruz and Minatitlan Project, MexicoDelivered in 4Q2012

Air Cooled Heat Exchangers for Phase 1, APLNG Project, AustraliaThe package was awarded to FBM Hudson with part fabrication in ChinaDelivered in 4Q2012

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››› Melaka & Shah Alam Facility

›››Kuantan Port Facility

››› Shah Alam Facility

Vessels for PNG LNG EPC4 Project, Papua New GuineaDelivered in 4Q2012

Towers for SalinaCruz-Minatitlan Project, MexicoErection work at site on 15 October 2012

Shell & Tube Heat Exchangers for Plant Rejuvenation & Revamp 2 (PRR2) Project, MalaysiaDelivered in 1Q2013

›››Gebeng FacilityPCD Filter Vessels & HP Flare KO Drums for Kemper Country Generating Facility, USADelivered in 4Q2012

Bringing Change to Malaysian Shores

The need for change was a clear message that came through since the approval and implementation of our Global Transformation Plan in the middle of 2012. KNM has to change and be united to realize its full potential to serve both its domestic and international clients around the world.

As we continue to improve our organizational structure to achieve our goals, we are at the same time putting in place initiatives to bring positive changes and improvement to its operational excellence.

Back in Malaysia, following the re-organisation of the Malaysian operations, the Process Equipment Division headed by Mr PT Lee has launched several new initiatives in January 2013, amongst them to include the implementation of additional performance based incentives, Applaud Award, daily morning exercise and Gratitude Pledge to create respectful, trusting and supporting environment leading to enhanced productivity and employee satisfaction.

Congratulations and applause to following recipients of the Applaud Award given out in January 2013.

1. Choy Chee Chuen Senior Project Manager – Project Department for his excellent

leadership skills at GFS.

2. Teoh Teck Lim GFS Works Manager for his excellent organizational skills

at GFS.

KNM Global Transformation News

3. Afidah Ariffin Document Controller – Project Department for her excellent

involvement as DC in most projects handled in year 2012.

4. Darius Amirul Head of Document Controller – Project Departmentfor doing

work beyond duty and his creativity with Announcement and The Change.

5. Lam Kok Leong Buyer – Central Procurement Department for his excellent

attendances with no medical leave taken from years 2011 to 2012 at KNM Headquarters.

6. Hoo Puei Ling Buyer – Central Procurement Department for her excellent

attendances with no medical leave taken from years 2011 to 2012 at KNM Headquarters.

Global Procurement Meeting29 – 30 January 2013

Key procurement personnel from Germany, Italy and China gathered at KNM’s corporate office for a 2-day Global Procurement Meeting to resolve issues on COEs and establish criteria and parameters for global centralized database of material and suppliers under the Global Transformation Plan.

Transformation Briefing at Kuala Lumpur Office

Transformation Director, Mr Tham Tuck Hoong conducted a briefing at the Kuala Lumpur Office recently which was aimed primarily at communicating the overall progress of the Group Transformation Plan to the employees. The briefing which took place on 7 February 2013 entailed various aspects of the transformation plan; its progress, the need for change, its impact and how it could turnaround and add value to the group for its

From left to right:

1. Steven Wong General Manager, HR

2. Steven J. Chadwick Executive Project Director – Hydrocarbon Plant

3. Terry Chew Executive Director

4. Mohd Nazmi Mohd Nageeb General Manager Engineering- Hydrocarbon Plant

5. Kenneth S. Forward GISSAR Project Manager

6. Ting Pang Cheo

7. Selvakumar KHAUZAK Project Manager

8. Tham Tuck Hoong Transformation Director

business survival and sustainability in the long term. Mr Tham sought the collaboration and understanding of all COOs of divisions, managers and employees to come together to bring the transformation plan to its full realization and thank everyone for their continuous commitment and patience during these challenging times.

17 – 20 September 2012

FBM Hudson was well represented at the Rio Oil & Gas 2012, a leading oil and gas event, held in Rio de Janeiro recently where it featured a parallel exhibit sprawling across 39,500 sq m in Rio Centro with more than 1300 exhibits from leading service companies and equipment manufacturers in addition to the technical conference.

The four-day conference attracted over 4,000 delegates gathered to get an insight into E&P activities in Brazil and the regulatory climate, particularly for the booming pre-salt sector. The conference also touched upon renewable energy as well as the refining and petrochemical sector.

The Expo provided an outstanding opportunity for national and foreign companies to display their products and services and stands as a prominent place for discussing major technological issues and promoting innovative technical designs.

FBM HUDSON at

Rio Oil and Gas 2012

The new BORSIG book “175 year of BORSIG – Technology for a Changing World 1837-2012” is published – September 2012After 1 ½ year of preparation, the new BORSIG book “175 year of BORSIG” has been published in German and English language.

The book follows the frequently dramatic twists and turns of the company in German industry, from its beginning through to the present days. Using a wide range of images, both historical and current, as well as eyewitness accounts from employees and observers alike, the book offers readers deep insights into Borsig´s development as a company.

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BORSIG rise to begin with. Today we celebrate in Berlin at our headquarters with our partners, customers and business associates that helped us especially during our last 10 years.”

The evening of September 15, 2012 was the highlight of a series of events celebrating the 175th anniversary.

BORSIG, one of the oldest companies in Germany, celebrated its 175th anniversary on 15 September 2012 at the company’s headquarters in Berlin/Germany.

The Managing Director of BORSIG GmbH, Mr. Stefan Beck hosted the official ceremony and welcomed more than 600 guests. The celebration was held at one of the oldest industrial workshops in Germany, the “Germaniahalle”, still used by BORSIG. Mr. Beck was joined by Mr. Klaus Wowereit, the Mayor of Berlin, Dr. Eric Schweitzer, Head of Chamber of Industry and Commerce of Berlin and Ir Lee Swee Eng, Executive Chairman/CEO of KNM Group Berhad, the owner of the BORSIG Group.

Mr. Stefan Beck stated:” We already celebrated our anniversary in May and June at our sites in Germany with all our 650 employees and their families to honor those who made

15 September 2012

BORSIG’s 175th Anniversary Celebration

GLOBAL EVENTS

From left to right : Mr. Stefan Beck, Ir. Lee Swee Eng, Dr. Schweitzer, Mr. Wowereit, Mr. Balzer, Mr. v. Knobelsdorff, Mr. Konrad Nassauer, Dr. Steffel, Mr. Brockhausen

175th anniversary event on 15 September 2012

BORSIG at the BorsighallenOctober / November 2012

At the end of the anniversary year 2012, the BORSIG Group went “public”. In one of the major shopping malls in the North of Berlin, BORSIG presented its history and products to the people of Berlin.

For 1½ week BORSIG showcased its history, product pictures, original work pieces, short movies about the company, its history and the actual job possibilities. A wheel of fortune, an area for kids to draw pictures, a “hot wire” and other activities were fun for everyone. People came from all over Berlin. Almost every visitor had its own history with the company. The whole event showed again the close relationship between BORSIG and the city of Berlin. It was a great success.

Fire Drill at KNM’s Corporate Office

The HSE team supervised a routine mock fire drill at KNM’s Corporate Office on 2 November 2012. The objective of the exercise was to test the company’s emergency response and recovery in the event of an actual fire during office hours. The drill was assisted by officials from Polis Diraja Malaysia.

A quarterly get-together luncheon was mooted by the management of the division on 12 September 2012 and subsequently on 21 November 2012 to serve as a platform for the staff to get together to foster camaraderie amongst colleagues at the work place, thereby enhancing cohesiveness of team unit whilst appreciating differences in team dynamics.

At its recent get together, Division COO, Phoon Hee Yau, said “As we welcome new team members into the project team for Energy Park Peterborough (EPP), we are also actively pursuing new opportunities within the renewable energy and power sector.

12 September and 21 November 2012Renewable Energy and Power Division

The headcount ramp-up for EPP demonstrates the commitment of KNM Group in making EPP a success, with the first milestone being syndicated financial approval which we trust would be in place by the 2nd quarter of 2013. Additionally, the management also has faith in the current team to deliver competitive proposals for various power plant projects within the region. Our vision is to develop the division into a leading EPC solutions and technology provider in advanced biomass-to-energy and power plant projects.”

Going forward, the division management intends to diversify the quarterly get-together program to include other out-of-office activities such as bowling and badminton sessions.

The routine fire drill was a success as all participants managed to reach the assembly point in less than 5 minutes. In most cases, people normally die due to smoke inhalation and not from the flames, which is why having an immediate evacuation scenario is crucial. Therefore, the HSE department takes full responsibility in training all employees on how to deal with emergencies in the time of fire breaking.

Health & Safety is the cornerstone of KNM’s success and hence it is the group’s policy to continue raising the standard of safety and protection knowledge at its workplace.

2 November 2012

GLOBAL EVENTS

KNM Renewable Energy Division (KNM RE) showcased its capabilities, products and services at the inaugural International Sustainable Energy Summit (ISES) 2012 organised by SEDA (Sustainable Energy Development Authority) Malaysia on 7 – 8 November 2012 at Putrajaya Marriott Hotel, Kuala Lumpur, Malaysia.

The two-day summit which drew a record participation demonstrated the commitment and support for the development of the sustainable energy sector in the country. The theme of ISES 2012, “Empowering Nations via Sustainable Energy” is timely as we seek alternative energy

sources to reduce our dependence on fossil fuel and transform the energy sector to encompass efficient, clean and renewable sources of energy. ISES 2012 also served as an ideal platform for RE and EE industry professionals in Malaysia and the world to meet, discuss and obtain latest updates and related issues on sustainable energy in Malaysia.

KNM RE management team led by Mr Phoon Hee Yau and En Abdul Halim Abdul Manap expressed satisfaction on the overall success of their participation in the exhibition and conference. Many new contacts were made.

7 and 8 November 2012KNM RE Goes on Show – ISES 2012

Working Visit by The Industrial, Trade, Entrepreneur Development and Cooperative (Invest Melaka) to KNM Melaka

On 8 January 2013, the delegation from Invest Melaka represented by head of agencies from MIDA Melaka, Perbadanan Kemajuan Negeri Melaka, Melaka Historic City Council, Politeknik Merlimau, SIRIM and Tenaga Nasional Berhad made a working visit to KNM’s Melaka Plant. The purpose of the visit was to interact with manufacturers and to review the problems faced by the manufacturers and entrepreneurs in Melaka including fostering closer relationship between the state

government and relevant agencies with the manufacturers and entrepreneurs.

During the visit, KNM took the opportunity to provide a brief presentation for the delegation to know KNM better as well as a tour of its facility. KNM thanked the delegation from Invest Melaka for choosing KNM as one of the leading manufacturers in Melaka.

NETWORKING AND SOCIAL ACTIVITIES

The masterpiece “Madonna con Bambino” comes back to Bergamo and FBM Hudson Italiana participated as sponsor

In December 2012, FBM Hudson Italiana had the honour of being a sponsor in the restoration of the painting “Madonna col bambino” (Virgin with Child) of Andrea Mantegna.

This painting belongs to Bergamo municipality since 200 years ago, it had been painted during XV century by the artist Andrea Mantegna (Padova 1430 – Mantova 1506). Andrea Mantegna spent his life in North-East Italy under the Venetian School of Artist, learning from artists such as Donatello, Piero della Francesca and Bellini. His paintings were produced on commission for nobility, the majority of his production has Christian subjects.

The peculiarity of this artwork is the serenity painted in the faces of the character and

FBM Hudson Celebrates Loyal Workforce at Christmas 2012

From left: Mr Felix Wong, Ms Masullo Angela, Mr Antonio Castiglioni & Mr Camillo Palazzi

glimpsed in the familiar hug of the Mother, with a trace of sadness in her eyes. The painting technique is a light tempera with precious materials used to paint the blue and gold of the Virgin dress and the red of the Child’s bracelet (it is a symbol of passion for his premature death).

The above described painting technique required 4 years of scrupulous and accurate works of restoration managed by “Opificio delle Pietre Dure” one of the most important international school of restoration located in Florence.

Now the painting is displayed in Bergamo upper town museum, where the FBM Hudson Italiana Spa and KNM logos stand proudly as sponsor of this masterwork restoration.

On 20 December 2012, FBM Hudson organized a Christmas Prize Giving Party followed by an award presentation ceremony to honour its dedicated employees for their long service in the company.

Members of the management led by Mr Felix Wong, Mr Antonio Castiglioni and Mr Camillio Pallazi were present to grace the occasion. A total of 37 staff members were honoured from the various categories having served 10, 20 and 30 years of service. Certificates were presented to the recipients.

The management also thanked the recipients of the award for their role, dedication and loyalty with the company over the years.

KNM’s Kuala Lumpur Office held its Gift Exchange on 21 December 2012 in conjunction with Christmas; a time for sharing and gift exchange.

Everyone gathered for a wonderful time away from work. KNM appreciates and values its employees, holding the belief that “Great Individuals Build Great Company”. The evening ended with a sweet and thoughtful gift-exchange session.

Christmas Exchange at Kuala Lumpur – The Caring and Sharing Exchange

KNM continued its support of worthy causes in the community, taking up the role as a sponsor in TA Securities’ Annual Treasure Hunt for charity, where proceeds collected were channeled to the needy through TA Foundation. KNM’s participation in this noble event included sending employees for the treasure hunt.

The event which took place on 19 January 2013 flagged off from Menara TA, Kuala Lumpur and ended at Genting Sempah with prize presentation, dinner and accommodation hosted by the organizer at Genting Highlands.

Despite having a broad range of people from various organizations, the event was a success. It was a meaningful charity hunt that raised social awareness on the plight of the less privileged.

Hunt for a Good Cause

each other better!

Canada Here’s the management team of KNM PE in Canada.

From left to right:Kim Bayrack Production Manager

Riley Milford CEO

David Mansfield Engineering Manager

Tai Ng Financial Controller

BelgiumThe management team from Belgium

From left to right: Andre Geens Director of KNM Europa

Els Geens Sales

Hans Verhelst Sales

This is a new initiative whereby we would like to feature the pictures of

our personnel from all over the world. Let’s get to know each other better!

We welcome more photos from you in the next edition of the newsletter.

Let’s get to know

KNM GROUP BERHAD │ World Class Process Equipment Manufacturer and Total Solutions Provider15, Jalan Dagang SB 4/1, Taman Sungai Besi Indah, 43300 Seri Kembangan, Selangor Darul Ehsan, MalaysiaT +603 8946 3000 | F +603 8943 4781 | E knm@knm-group.com | www.knm-group.com

Italy From left to right:Cinzia Locatelli Assistant to Mr Felix Wong & Mr Antonio Castiglioni

Andrea Cordoni CND Operator

Giordano Manuzzi Qualità Inspector

Nausicaa Gandolfi Assistant to Mr Camillo Palazzi

Claudio Cagliani Production Manager