Press Metal buys Australian raw material supplier for RM738m

PETALING JAYA: Press Metal Aluminium Holdings Bhd’s 80%-owned subsidiary Press Metal Bintulu Sdn Bhd (PMBintulu) is acquiring a 50% stake in Japan Alumina Associates (Australia) Pty Ltd (JAA) for A$250 million (RM738.98 million).

Press Metal told Bursa Malaysia that PMBintulu had on Oct 17 entered into an asset sale agreement with ITOCHU Minerals & Energy of Australia Pty Ltd and ITOCHU Corp for the acquisition.

JAA holds 10% participation interest in the Worsley Alumina unincorporated joint venture which owns and operates the Worsley Alumina Project, one of the world’s largest and lowest cost alumina producers.

Press Metal said the acquisition will provide the group the opportunity to access 5% of the annual production of the Worsley Alumina project which amounts to 230,000 metric tonnes of alumina per annum.

“The acquisition is an effective approach towards ensuring Press Metal’s long term access to raw material and reduces its exposure and reliance on third party suppliers.”

The proposed acquisition, which will be fully funded via external bank borrowings, is expected to be completed by the first quarter of 2019.

Press Metal CEO Tan Sri Paul Koon said the acquisition forms part of the group’s strategies to strengthen the operations vertically and to partially secure long-term supply of alumina for the smelting operations with expectations of cost savings.

“We are moving in to mitigate alumina price volatilities by securing the supply of certain volume of alumina obtained through JAA, instead of third parties.”

“With this and our joint venture with Sunstone Development Co Ltd in China for the manufacturing of pre-baked carbon anodes (which is expected to be operational by year-end), Press Metal has moved to gain direct access to the most essential raw material and consumable for aluminium production, being alumina and carbon anodes.”

Press Metal’s share price gained 1% to close at RM4.83 today with 1.34 million shares done.

Source link

Leave a Reply

Your email address will not be published.