KUCHING: Press Metal Aluminium Holdings Bhd, which owns aluminium smelting plants in Bintulu and Mukah, expects aluminium demand to outstrip supply going forward.
According to group chief executive officer (CEO) Datuk Koon Poh Keong, aluminium demand is still expected to increase in 2019 due to its inherent advantages and key characteristics – strong, durable, flexible, lightweight and corrosion-resistant – making it a versatile metal of choice for various industries.
He said demand in China is also expected to pick up in anticipation of the government implementing stimulus programmes for the economy
However, for the near term, Koon said the industry still faces uncertainty of the Brazil alumina refinery in resuming its full production capacity.
As such, Koon said aluminium costs might remain high in the near term.
Alumina or aluminium oxide is a raw material required to produce primary aluminium.
Based on media reports, a federal court in Brazil has three months ago upheld a decision by a state court forcing aluminium-maker Norsk Hydro to run its Alunorte alumina refinery – the world’s largest – at half capacity.
The decision was part of environmental dispute with the Brazilian authorities after the Norsk Hydro admitted to making unlicensed emissions of untreated water during severe rains last February.
As a result, the company was ordered to slash its refinery output by 50 percent.
Press Metal, which is South-east Asia’s largest integrated aluminium producer with an annual capacity of 760,000 tonnes, recorded higher group revenue of RM9.16 billion in financial year ended Dec 31, 2018 (FY2018), a significant increase of RM982.4 million or 12 percent from RM8.18 billion in FY2017.
Group pre-tax profit surged to RM874.8 million from RM808.8 million year-on-year.
In fourth quarter 2018 (4Q-2018), group revenue improved to RM2.25 billion from RM2.13 billion in 4Q-2017 while pre-tax profit increased marginally to RM201.9 billion from RM200.7 billion during the same period.
Koon attributed the higher revenue to the completion of the acquisition of Leader Universal Aluminium Sdn Bhd (which has subsequently renamed Press Metal Aluminium Rods Sdn Bhd or PMAR) in March 2018.PMAR’s revenue has since been consolidated into the group revenue.
The higher pre-tax profit by RM66 million was mainly due to contribution from PMAR and insurance claims received during the financial year under review.
Koon said the group would continue to focus on value-added contribution, which is expected to increase profit margin, and to look out for strategic expansion opportunities.
On Press Metal Bintulu Sdn Bhd’s proposed acquisition of a 50 percent equity interest in Japan Alumina Associate (Australia) Pty Ltd for A$250 million (RM739 million), he said the deal is expected to be completed in 1Q-2019.
On Press Metal group’s joint venture with Sunstone Development Co Ltd announced in September 2016, he said the group had injected about RM32.4 million as its investment in the joint venture.
Press Metal has agreed to participate in the establishment and operation of a new JV company – Shandong Sunstone & PMB Carbon Ltd Co in China to manufacture pre-baked carbon anodes.
The plant has just commissioned its manufacturing operations, added Koon.
