KUALA LUMPUR (May 20): KNM Group Bhd has bagged a US$43 million (RM175 million) contract from Norman Process Oils Malaysia Plant Sdn Bhd to undertake engineering, procurement, and construction (EPC) works for the treated distillate aromatic extract (TDAE) plant at Tanjung Langsat Port, Johor.

The TDAE plant is to produce carcinogen-free (green) rubber process oils for synthetic rubber and tyre industries.

In a filing with Bursa Malaysia today, KNM said its wholly-owned subsidiary, KNM Process Systems Sdn Bhd (KNMPS), has accepted a letter of award from Norman for the proposed project.

It said the duration of the contract will be for 20 months, commencing from a date that is subject to the execution of a formal contract agreement to be duly signed between the two parties.

"The contract is expected to contribute positively to KNM Group's earnings for the financial years ending Dec 31, 2016, 2017 and 2018," said KNM.

KNM noted while the contract is subject to certain risks mainly in the power, oil, gas, petrochemical, and energy industries, the group is already operating in these industries and hence, would continue to be exposed to risk factors that it currently faces.

"Although KNM Group with its vast experience may undertake efforts to mitigate the various risk factors, there is no assurance that any change in the above risk factors will not have a material adverse effect on the business and operations of KNM and/or KNMPS," it added.

KNM's stock closed unchanged at 47 sen in the morning session toda, with 6.14 million shares traded. Its market capitalisation stood at RM991.76 million.