Issue 11 │ April 2017

KNM Bulletin

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

KNM STARTED THE YEAR OF THE ROOSTER ON AN AUSPICIOUS FIFTH DAY OF CHINESE NEW YEAR

On 1st February 2017, excitement filled the corporate office of KNM on the fifth day of Chinese New Year as lion dancers performed and blessed the office along with the release of fire crackers to mark the start of an auspicious, prosperous and reaping year for the company. The lion dance troupe accompanied by the God of Fortune went around the office to bestow well wishes to the management and staff.

Employees sharing joyous moments at a staff luncheon on 8 February 2017.

Editorial Team• Michelle Mok (KNM)• Antje Stoya-Ballantyne (BORSIG)• Angela Masullo (FBMHI)

›››German Facilities

BORSIG Process Heat Exchanger GmbH – Big in Japan

BORSIG Process Heat Exchanger GmbH – New application for the BORSIG Scraped Surface

Exchanger

PROJECT HIGHLIGHTS

BORSIG Process Heat Exchanger GmbH (“BPHE”) participated successfully in the preparation of a reliability improvement program for an ethylene plant in Japan. Being the chosen supplier, BPHE succeeded in convincing the client to apply BORSIG’s well proven technology for double

The BORSIG scraped surface exchanger has so far been primarily responsible for removing paraffin from lubricating oil or for recovering paraxylene from petroleum for the plastics industry. Now the company has developed two further applications for the scraped surface exchanger - in the cosmetics and food industry.

BPHE supplied two scraped surface exchangers for the construction of a new and the expansion of an existing shea butter plant in Ghana / Africa. With a length of 15.4

BORSIG Process Heat Exchanger GmbH – Order from China

An engineering contractor from China placed another order with BORSIG Process Heat Exchanger GmbH (“BPHE”) for the engineering, manufacturing and supply of a waste heat recovery system for a single train fertilizer plant to be erected abroad.

The fertilizer plant has a capacity of 2050 MTPD. The waste heat recovery system is located after the secondary reformer and considered a “critical item”. The scope of supply of the waste heat recovery system will be completed and supplied based on delivery basis, FOB Hamburg Seaport by end of October 2017. With its empty weight of 250MT, the reformed gas waste heat boiler is by far the heaviest heat exchanger ever manufactured in BPHE‘s Berlin workshop. Delivering this system for the fertilizer plant shows the reliability and confidence of the client in using BORSIG‘s technology in meeting the needs of the growing world population.Prior Waste Heat Boiler constructed the same way, delivered in 2011

pipe design in this project. The quench exchangers for two cracking furnaces will be manufactured and supplied by BPHE in two lots by end of 2017 and in the beginning of 2018 respectively.

m / 15.9 m and a height of 5.3 m / 4.8 m, the units weigh 48 tons and 50.5 tons respectively. In Ghana, the scraper is used to extract valuable shea butter from the grape-like shea nuts. Scraped surface exchangers consist of an outer and an inner pipe. A cooling liquid in the outer pipe causes the shea butter to crystallize on the walls of the inner pipe, scraped off by scraper blades in the inner pipe, transported to the cooler outlet and then cleaned by a filter.

GLOBAL EVENTS

BORSIG Service GmbH Project Engineering lectures at major energy and power plant fairs in Germany

Inaugural visit by Mr Han Naishan,

General Manager of CNI23 to KNM on 23 May 2016.

Visit by FWT Energy GmbH to KNM on 5 July 2016.

The Project Engineering division of BORSIG Service GmbH has introduced its successful concept of flexibility by individual boiler optimization at all major energy and power plant fairs in Germany.

The case study was about a paper mill in Lower Saxony/Germany where the Project Engineering division managed to significantly increase the flexibility of a steam generator. Prior to the optimization, the paper mill had two autonomous boilers for steam generation and one gas turbine with an output of 5MWe. In future, the cheaper coal-fired boiler should be able to cover the majority of the reduced steam demand. BORSIG Service GmbH first install convective heating surfaces in the bypass duct, namely one additional evaporator and superheater before implementing an intelligent control logic.

Despite the short operational window of downtime available during the retrofit and erection of the plant, BORSIG Service GmbH had completed the work involving the commissioning and the operational optimization successfully.

GLOBAL EVENTS

BZM Workshop in Singapore

BORSIG ZM Compression GmbH

BORSIG Compressor Parts GmbH, a subsidiary of BORSIG ZM Compression GmbH and a member of the BORSIG Group, has relocated to its new headquarters at the BORSIG workshop in Gladbeck/North Rhine-Westphalia/Germany and provides excellent production and engineering facilities for high-tech compressor valves. The BORSIG site in Gladbeck is already home to three other BORSIG companies: BORSIG Service GmbH, BORSIG Membrane Technology GmbH and the service branch of BORSIG ZM Compression GmbH. Gladbeck is also the place of origin of the BORSIG’s reciprocating valve production.

BORSIG Compressor Parts GmbHRelocation of Manufacturing Site

Two technical workshops in EgyptAt end October 2016 BORSIG ZM Compression GmbH (“BZM”) conducted two technical workshops in the Egyptian cities of Cairo and Alexandria with more than one hundred participants. Decision makers from technical, commercial and management levels of the country’s petrochemical and fertiliser industries as well as relevant ministerial bodies and local EPC contractors have been invited to the events in order to provide a comprehensive overview of BZM’s product portfolio. In addition to the core products - API 618 reciprocating compressors and API 617 Ch.3 integrally geared centrifugal compressors – BZM displayed its combined control and monitoring system “BlueLine” and for the first time provided an outlook on the new product “turbo expanders” which BZM intends to introduce in 2017.

BORSIG ZM Compression GmbH (“BZM”) organised six technical workshops in Singapore, Indonesia and Thailand in order to increase brand awareness for BORSIG. The latest compressor technologies for reciprocating and integrally geared centrifugal compressors, for compressor optimized operation and maintenance have been shared with around 110 seminar participants, coming from Asian EPC’s, packaging as well as oil and gas industries. These technical workshops have been a great success.

As a first concrete result, BZM was invited to quote for a major refinery expansion project in Indonesia which required the supply of 12 reciprocating compressors.

Technical workshop program in Asia in 2016

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On 10 October 2016, KNM sealed the following financing facilities at a signing ceremony held in Kuala Lumpur:

(1) KNM Group Berhad’s guarantee facility for its guaranteed bonds of up to approximately THB2.78 Billion (approximately USD80 Million) from Credit Guarantee and Investment Facility (“CGIF”) (the “Proposed Thai Bonds”).

Proceeds from the Proposed Thai Bonds will be utilised by KNM to support its business unit in Thailand, Impress Ethanol Co Ltd (“IEL”) for the purposes amongst others, refinancing of IEL’s debt financing, future expansion and working capital expenses for its bio-ethanol plants.

KNM is the first company from Malaysia to obtain a credit guarantee from CGIF for its bond to be launched in Thailand which is rated AAA/Stable by TRIS Rating Co Ltd, Thailand and first Malaysian public listed company to issue Thai currency denominated bonds in Thailand’s capital market.

(2) KNM Capital (PIC) Sdn Bhd, a wholly-owned subsidiary of KNM, has procured financing facilities of RM360 Million comprising of:-

(a) Islamic guarantee facility based on the Shariah principle of Al-Kafalah of up to RM200 Million from Danajamin Nasional Berhad (“Danajamin Facility”) to guarantee a proposed capital market instrument; and

(b) Blanket working capital facilities of up to RM160 Million from Affin Islamic Bank Berhad (“Blanket Working Capital Facilities”).

The Danajamin Facility and Blanket Working Capital Facilities are in relation to the financing of contracts relating to the Refinery and Petrochemical Integrated Development (“RAPID”) project in Pengerang, Johor, Malaysia.

KNM achieved another major milestone where this is the first time KNM obtains the credit guarantee from Danajamin and substantial working capital facilities from Affin Islamic Bank Berhad to support KNM’s contracts despite challenging capital market conditions.

KNM Sealed Guarantee Facility For Up To THB2.78 Billion Guaranteed Bonds, RM200 Million Islamic Guarantee Facility And RM160 Million Blanket Working Capital Financing Facilities

NETWORKING AND SOCIAL ACTIVITIES

BORSIG GmbH – Keep on running…

On 27 May 2016 at IKK BB Berliner Firmenlauf, the BORSIG running team took part in the 2016 Berlin company running cup. 14 employees faced a challenging 5.5 km course. Competing with 14,000 runners, the fastest BORSIG’s participant reached the 82th placing in only 20 minutes and 21 seconds.

FBM Hudson Italiana Sponsored The KBR’s 2016 Global Ammonia Purifier Technology Licensees Conference

FBM Hudson Italiana attended as a Silver Sponsor to KBR’s Global Ammonia Purifier Technology Licensees Conference which took place in Denver, Colorado, USA on 18 September 2016.

KBR’s Purifier ammonia processing technology offers lower energy consumption than competing technologies in the industry, resulting in reduced operating costs for the end user.

This has been a great opportunity to engage with key decision makers from purifier plants around the world.

FBM Hudson Italiana is Loyal Supporter to KBR’s Annual Charity Golf Tournament FBM Hudson Italiana is once again proud to be part of KBR’s 10th Annual Charity event held on 22 September 2016 which supports the local and national non-profit organizations.

This year, FBM Hudson Italiana was represented by its USA Representative, Mr Frank Allen along with KBR’s members comprising of Mr Will Cottle, Ms Monica Ruiz and Ms Kathleen F. Mills and won the 4th placing at the golf tournament. The team scored 8 under par with a total of 64. FBM Hudson Italiana participated as a Silver Sponsor including sponsoring a complimentary drink cart for the event.

Birthday Celebrations

KNM’s Group CEO, Ir. Lee Swee Eng on 2 September 2016

At the Bowling Tournament hosted by Department of Occupational Safety and Health of Putrajaya on 6 November 2016

KNM’s Group General Counsel, Mr Flavio Porro on 24 May 2016

KNM’s Group Finance Director, Mr Terence Tan together with Senior Manager, Group Treasury, Mr Cheong Kok Ming on 6 April 2017

OF HEALTH AND SAFETY

CNIEC wins HSSE AwardsCongratulations to our CNIEC staff for clinching several HSSE Awards for the month of October 2016 awarded by Toyo Engineering and Construction for the Petronas RAPID SCC Project, Pengerang, Johor.

Best Workers for the month of October 2016 - CNIEC

Best of the Best Contractor Winner Award - CNIEC

Best of the Best Supervisor Award – Khoo Kong Siang (CNIEC)

KNM Initiates “No Lift Day” & “No Smoking” CampaignOn 3 June 2016, KNM’s Group HSE initiated a “No Lift Day” and “No Smoking” Campaign at its corporate office in Seri Kembangan which aimed to promote a healthier lifestyle. Staff at KNM are encouraged not to smoke and to take the stairs to their offices on every Friday of the week, being designated as “No Lift” days.

As we are promoting healthy lifestyles, it is only right that we take the lead and set an example,” Group CEO, Ir Lee Swee Eng said.

KNM GROUP BERHAD 521348-H 15, 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

Being PreparedClose to 200 employees at KNM were evacuated within 4 minutes from its Corporate Office in Seri Kembangan during its annual fire drill on 9 December 2016 in the presence of BOMBA authorities. The employees took the drill seriously and cooperated well to ensure an effective and expeditious evacuation. Some may view fire drills as troublesome as they are required to leave the comfort of their air-conditioned office and assemble under the hot sun during the training. However, it is an essential practice in preparing for employees’ safety and to alert them on the necessary steps to be taken during a fire evacuation.

Alexander NeubauerMD & CEO of BORSIG GmbH

Alexander Neubauer was named Managing Director and Chief Executive Officer at BORSIG GmbH, effective September 1, 2016, following Mr. Michael Fix, who has left the company. Prior to assuming his current position, Mr Neubauer joined KNM Group, the parent company of BORSIG in 2016 as CEO of KNM Renewable Energy & Utility Sdn Bhd, Malaysia. He has over 20 years of experience working in leading management positions involving the energy business.

A warm welcome to all our new member!New Member

As part of its CSR initiatives, KNM organized its annual blood donation as well as organ pledge awareness campaign at its company’s premise in Seri Kembangan on 8 November 2016. Over 90 registrants were screened for blood donation and slightly over 60 successful donors were recorded during the one day campaign.

According to the National Blood Centre, one blood donation can save three lives as there are three components in the blood serving various functions. Hospitals nationwide are in constant demand for regular blood supply due to the short lifespan of some components in the blood.

KNM is truly grateful to all those who made the efforts in coming forward to support this noble and meaningful event dedicated on saving lives.

Annual Blood and Organ Pledge Campaign at KNM