KUALA LUMPUR: Dolomite Bhd is ceasing, albeit temporarily, its thermal power generation business in Shandong, China, after less than a year of operation.
The building material manufacturer, construction firm and property developer told Bursa Malaysia blamed the Shandong government for the temporary halt to the operation of its indirect wholly-owned subsidiary Shandong Dolomite Thermal Power Co Ltd (SDTPL), which began its steam and electricity business on March 3.
According to Dolomite, SDTPL has yet to achieve the required steam sales mainly as a result of the Shandong government not fully enforcing its directive to shut down small boilers of nearby industries.
It was reported that China planned to eliminate 44,000 coal-fired industrial boilers and switch households to natural gas or electric heating.
Due to the enforcement issue, Dolomite said, its board had decided to temporarily cease the operation of SDTPL with effect from Nov 30.
The construction of Dolomite’s 2x12MW thermal power plant was completed in 2015. Last year, although it did not yet start commercial production, it incurred a loss before interest and tax of RM13.99mil mainly due to loss on foreign exchange.
Since production kicked off this year, the business has been in the red. It incurred a loss before interest and tax of RM10.19mil for the nine-month financial period to Sept 30, 2017.
All the other main operating segments of the group were profitable for the period.
“The proposed temporary cessation will give the Shandong government time to fully enforce the closure of small boilers,” the loss-making company said.
Dolomite did not give a forecast of when the operation would resume.
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