Monday January 3, 2005 - KUMPULAN Emas Bhd (KEB) hopes to return toprofitability by 2006 by venturing into new core businesses and expandingits palm oil operations in India and Solomon Islands, chief executiveofficer Kee Lian Yong said.

He said the group was aggressively exploring and developing new businessesthat would bring good value to shareholders, and one such business was themanufacture of wood-plastic composite, i.e. natural fibre composite (NFC).

"We have invested RM9mil in the new business under our subsidiary,Tackwise Innovations Sdn Bhd," he told reporters after KEB’s AGM inPetaling Jaya on Friday last week.

He said the NFC could be used to replace plastic in various applicationsand was much cheaper compared with plastic, which has seen increasingprices due to escalating petroleum prices.

He said construction of a plant was in progress in Semenyih and commercialproduction would begin in the next four months. The company had beengranted a pioneer status for the product, he added.

Besides the domestic market, Kee said the group expected to market NFCproducts to the US, Europe, South Korea, China and Australia.

For the financial year ended July 31, 2004, the group's revenue declinedfrom RM286mil to RM48mil, mainly due to the exclusion of contribution fromSalcon Engineering Bhd, which ceased to be its subsidiary from July 21,2003.

Salcon was listed on Bursa Malaysia main board on Sept 3, 2003. As part ofthe listing proposal, KEB's interest in Salcon was reduced to 36% from51%.

Kee said that after the listing of Salcon, the group's engineering arm,KEB was now focusing on strengthening and developing its existingbusiness, mainly in property and plantation.

The group reported a loss after tax of RM168mil, of which about RM150milrelates to an exceptional loss arising from impairment of the group'sproperty asset, South City Plaza. – Bernama