TOKYO （Nikkei）--Sumitomo Corp.announced Tuesday that it will jump into the aluminum smelting business in Malaysia by acquiring a 20% interest in local firm Press Metal Sarawak Sdn Bhd.
Sumitomo already participates in aluminum smelting in Australia and Brazil. The decision to extend this business to Malaysia reflects a strategic move to tap into what the trading company anticipates will be increasing demand for aluminum there and in other parts of Asia.
Press Metal Sarawak is involved in a project to build two aluminum smelters in Malaysia. The first factory is scheduled to become fully operational at year's end and will be capable of producing 120,000 tons of aluminum annually. The second plant, with 240,000 tons of planned capacity, is expected to be fully operational at the end of 2012.
Sumitomo will shoulder some of the construction costs of the first factory and, in return, will have sales rights to some of the output. It also has an option to acquire an additional 5% of Press Metal Sarawak by purchasing some of the remaining 80% of the shares owned by Press Metal Bhd.
If Sumitomo opts to invest in the second smelter and buy the additional stake, its total investment in the Malaysian aluminum smelting business could reach as high as 25 billion yen.
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