PETALING JAYA: Press Metal Bhd, the region’s largest aluminium smelting firm, is targeting to spend an additional RM100 million in capital expenditure (capex) this year as it continues to expand its value-added products.
It plans to expand its conveyors in its Bintulu plant in order to double its billet production. This would help drive the contribution of the group’s value-added products from 20% presently to a targeted 50% later this year, said chief executive officer Datuk Paul Koon Poh Keong.
Speaking to reporters after the group’s extraordinary general meeting yesterday, Koon said the group also targets to grow output by 20% to the full capacity of 760,000 tonnes from 620,000 tonnes last year.
Press Metal is also exploring opportunities to expand upstream in order to secure its own supply of raw materials, Koon said. Alumina, which currently makes up 30% to 40% of the group’s costs, is currently fully imported.
According to Koon, the group may invest a few hundred million US dollars in acquiring refining assets in Indonesia within the next two to three years as it explores such opportunities.
Koon added that he is positive about the group’s growth in China, where encouraged use of aluminium, especially in automobiles and infrastructure, is likely to sustain demand.
“China is also very concerned about the environment and its emissions,” said Koon, adding that the limitations on production in China are good news for Press Metal.
Last October, Press Metal entered into a joint venture with Sunshine Development Co Ltd in China to form Shandong Sunstone & PMB Carbon (SSPC), in which it holds 20% stake and has an option to increase its stake to 40%.
SSPC is targeted to begin producing pre-baked carbon anodes, part of Press Metal’s major raw materials, once its plant is completed sometime in late 2018 or early 2019.
Yesterday, Press Metal obtained approval from shareholders for its proposed internal reorganisation, which would see a new holding company (NewCo) assume its listing status.
The NewCo will act as an investment holding company under the moniker Press Metal Aluminium Holding Bhd.
Press Metal has also received approval to exchange one NewCo share for every Press Metal share.
On Monday, Press Metal posted a 250% jump in its net profit to RM131.78 million for its fourth quarter ended Dec 31, 2016 from RM38.8 million in the previous corresponding quarter, boosted by additional output and improved London Metal Exchange prices.
Press Metal finished among the top 20 gainers on Bursa Malaysia yesterday as its shares rose 13 sen or 5.53% to a five-year high of RM2.48 with 14.57 million shares traded. The counter has risen 78 sen or 45.88% year to date.
The group has a market capitalisation of RM9.19 billion.