Press Metal to invest RM1bil in third refinery


The new refinery is expected to have an annual production capacity of one to 1.2 million tonnes under Phase One.

PETALING JAYA: Press Metal Aluminium Holdings Bhd will be investing RM1.04bil in cash for its new alumina refinery joint-venture (JV) in West Kalimantan, Indonesia.

This will be the third refinery of Press Metal, owned by Malaysia’s fifth richest man Tan Sri Paul Koon Poh Keong and his brothers.

The other two refineries are PT Bintan Alumina Indonesia and Worsley Alumina Unincorporated Joint Venture in Australia.

Press Metal announced yesterday that it has partnered with PT Alakasa Alumina Refineri (AAR) and PT Dinamika Sejahtera Mandiri (DSM) for the JV - undertaken via PT Kalimantan Alumina Nusantara (KAN).

Press Metal will subscribe to a 80% stake in KAN for RM1.04bil that will be paid in seven tranches over the next year. It will be funded through internally generated funds.

AAR and DSM will hold 19.77% and 0.23%, respectively.

AAR is a subsidiary of PT Alakasa Industry Tbk, which is listed on the Indonesia Stock Exchange.

KAN will establish and operate an integrated alumina refinery plant, power plant, jetty and supporting infrastructure in Sanggau, West Kalimantan.

Alumina is a primary raw material for smelting.

The new refinery is expected to have an annual production capacity of one to 1.2 million tonnes under Phase One, with a potential expansion to double this output.

The total cost for Phase One is US$750mil (equivalent to RM3.24bil).

In a statement, Koon said the JV allows Press Metal to not only expand its upstream business operations but also unlock synergies that will enhance the overall value of the group.

“This venture aligns with our strategy to reinforce and continuously strengthen ourleading position as the largest smelter in South-East Asia and boost our competitive edge across the aluminium value chain.

“It is an effective approach towards expanding our upstream presence while ensuring higher self-sufficiency and a stable supply of our alumina needs, which are critical to our core smelting operations.

“This will also reduce our reliance on third-party suppliers and traders, ensuring greater operational resiliency and efficiency.

“With a long-term offtake agreement expected to commence once the refinery is operational, we anticipate cost savings that will further optimise our overall operations,” he added.

Koon and his brothers have a net worth of US$5.3bil, according to Forbes.

Press Metal is the leading integrated aluminium producer in South-East Asia, with a midstream smelting capacity of 1.08 million tonnes per annum.

Its downstream extrusion segment possesses a production capacity of 230,000 tonnes per annum.

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