Press Metal expects Mukah smelter to start ops by next April

KUALA LUMPUR: Press Metal Bhd, an aluminium extrusion firm, expects its 80%-owned Mukah aluminium smelter plant in Sarawak to start production by April next year and churn out up to 100,000 tonnes of aluminium annually, said group chief executive Datuk Koon Poh Keong. "Hopefully when the plant is ready, we can reduce the country's dependence on imports of aluminium. The country imports about 200,000 tonnes (of aluminium) annually," he told reporters after the company's AGM here yesterday. Construction of the smelter would commence by the second half of this year, said Koon, adding that China's Aluminium Corp of China Ltd (Chalco) would provide technology and engineering expertise to Press Metal. "In terms of future contribution from the smelter plant, we expect it to be based on the performance of metal (on the London Metal Exchange)," he said. Koon said Press Metal would be investing a total of RM700 million in the smelter project, of which 70% or RM490 million would be financed through borrowings and the balance via internally generated fund. Its net gearing currently stood at 0.8 times. Press Metal had in February inked a memorandum of understanding (MoU) with Syarikat Sesco Bhd, a unit of state utility Sarawak Energy Bhd, to supply 510 megawatts of electricity from the coal-fired Mukah power plant. Besides upstream activities, Koon said Press Metal, which had a market capitalisation of RM463 million as of yesterday, would focus on expanding its marketing network and producing more value-added products to help improve its profit margin. For its first quarter of ended March 31, 2008, Press Metal posted a 54% decline in net profit to RM11.43 million from RM25.61 million a year earlier mainly due to escalating raw material cost, in particular coal used in power plant. Press Metal closed two sen or 1.55% lower at RM1.27 yesterday. Source: The Edge Daily