Smelting plant’s restoration underway

KUCHING: Press Metal Bhd has commenced restoration works for its Mukah aluminium smelting plant, which was shut down after its production facilities suffered damage from the recent statwide power outage.

The company said it hoped to resume production before the end of the year.

“The insurance companies and loss adjustors have conducted a preliminary assessment of the damage from the power outage and the management is currently working on the detailed documentation for the insurance claim.

“While the insurance claim is in the process, the management has proceeded with the restoration works and hope to re-commence production before the end of the year,” said Press Metal in notes to its latest quarterly results.

The six-hour power failure suddenly shut down the smelting plant’s preliminary production lines and led to a significiant drop in temperature of the production pots. None of the pots could be salvaged as solidification had taken place in the reduction cells of the potline.

Press Metal said the power outage, however, had minimium impact on its Samalaju smelting plant, which was commissioned for production in fourth quarter-2012 and close to achieving full commercial production capacity.

The Samalaju smelting plant is 2.6 times bigger than the Mukah plant, which previously had an installed capacity of 120,000 tonnes per annum of aluminium products.

In the second quarter to June 30, Press Metal’s group pre-tax profit grew 12% to RM26.8mil from RM23.9mil in the corresponding period last year on sharply higher revenue of RM795.3mil from RM522.4mil. Earnings per share, however, slipped to 3.95sen from 4.37sen.

On a six-month basis, group’s pre-tax profit improved to RM62.2mil from RM56.7mil in first half-2012, boosted by higher revenue of RM1.52bil, up from RM1.1bil.

Commenting on current year’s prospects, Press Metal said the group’s total revenue in the third quarter would be affected by the temporary shut down of the Mukah plant.

The company said although the global business environment remained challenging with China and emerging economies registering lower growth, demand for aluminium continued to grow.

It said this augured well for the group as its Samalaju smelting plant was near to achieving full production.

In April, Press Metal entered into a memorandum of understanding (MoU) with Japan’s Sumitomo Corporation with a view to dispose of 20% equity interest in wholly-owned subsidiary Press Metal Bintulu Sdn Bhd to the latter.

The subsidiary owns the Samalaju aluminium smelting plant.

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